One big secret of the super rich
No-one has ever become truly wealthy based on just a salary, notes Paul Leonard, a regional head at financial services company, Citadel.
“You cannot become rich by selling your time, as there simply isn’t enough of it. It is essential, therefore, to harness sources of wealth generation beyond your own limited personal resources of time and energy.”
“The best way to do this is to invest your capital and ensure that it grows,” Leonard said. “If you switch spending for saving and then invest that to maximise the returns on the investment, you will be able to create real wealth. And more, it will generate a passive income for the rest of your life.”
According to Citadel, equities is the asset class that has outperformed all others in the long term and the smart money is, therefore, invested in shares.
If that’s what the smart money does, Leonard asks the following: shouldn’t we all be doing the same thing, at least in part? Shouldn’t we all be investing at least some of our money in shares if they give you the best potential returns?
“Increasing your basic understanding of investments will make you more comfortable with the managed risks involved in well diversified investments and give you the opportunity to share in the growth of the economy,” Leonard said.
Citadel pointed out that most people will never be financially independent – ‘because we don’t know how to handle money’.
It stated that while, no-one has ever become truly wealthy by just earning a salary, there are many people who have only been salary earners who have become truly wealthy in their own right. “They never owned a business. They were never the MD or the CEO. They simply knew what to do with their money once they got it.”
“If you never get your money to work for you, you will always work for money. If you don’t learn to work smart, you will always have to work hard,” said Leonard.
“So, do not be passive in your finances, do not take a brainless approach expecting others to think for you. Nobody else has as much interest in your money as you. Ask, learn and empower yourself to make the very most of your money that you can.”
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