We are born spendthrifts. We are always in a tearing hurry to spend money even before we have earned it. That is why credit card companies are doing roaring business. So are the loan department of banking companies. This is precisely the reason why we fail to generate and build up wealth.
Don’t splurge all the money you earn. Save up at least 10% of your earnings. That is the first law of wealth.
The second law of wealth says: Don’t stash away your savings in your treasure chest and go off to sleep. That amounts to dead investment. Instead, invest your savings sensibly so that you earn interest or profit from it. Make sure your money keeps multiplying while you sleep.
Avoid debts at all costs. Don’t borrow unless it is absolutely necessary. Postpone your needs if possible and tend to them when you have sufficient money in your pocket. If you take out a loan, the interest on loan will be a drain on your earnings. The poor remain poor because of the interest they pay. The rich, on the other hand, earn interest or profit through their investments and grow richer. This is the third law of wealth.
The fourth law of wealth is: don’t fall for get rich quick-schemes. Most of these schemes are designed to entice unsuspecting and gullible investors. These schemes are floated by fly-by-night operators. Check and double-check everything before you decide to invest on something of this sort. Try to invest in opportunities with long term gains in mind.
Invest in knowledge. Try to gain knowledge and skills that would improve your earning potential. Invest in yourself and try to enhance your earning capacity. This is what the fifth law of wealth says.
The sixth law of wealth lays down that you should safeguard your wealth and growing fortune by diversifying your investment. In other words, don’t put all your eggs in the same basket. Invest in different segments of the industry to minimize your risks. Invest in insurance. Plan your portfolio tactfully. Seek advice from experts, if necessary.
If you follow these six laws of wealth management, you will hit the highway to becoming wealthy sooner than later. Eventually you will master the secrets of creation and management of wealth.
