In today’s world, people are really struggling with issues of creating wealth for them. Don’t worry this post will make you aware of the secret required for enormous wealth creation and also some great wealth creation tips and books which will help you to become wealthy.
The secret of wealth creation
“Assets are the hen which gives golden eggs, so make sure you acquire more of such hens.” – Anonymous
When I read the book “Rich Dad Poor Dad”, I was very much influenced by Robert Kiyosaki’s Rich Dad for the quote he said “Assets brings money to your pockets” and “acquire assets not and liabilities”. But, I thought something was missing there which I later came to understand by a different book.
Richard Templar in his book “The Rules of Wealth” has a different meaning to Wealth. He quotes as his friend said “He will be wealthy if he was not living off what he has amassed (which is his capital). Nor would he be living off the interest on his capital. He would be wealthy if and only if, he is living off on the interest of his interest”
The above thing just blew my mind and when I read another book it got confirmed wealth creation
George Classon in his classic book “The Richest Man in Babylon” uses the analogy of the “Capital as a grandfather. Interest on capital (as a son) and interest on interest (as the grandson) and so on” He simplifies that you don’t have to eat away your sons at-least, eat your grandson’s. Which means spend your lives with grandson interest.
(Pro Tip: Never touch your capital, if you end up eating the hen which gives a golden egg, how on earth will it give you golden eggs)
My mother didn’t read any book but she knew how to make her money work and she knew very well how to create wealth. She accumulated some money close to Rs.40000 and then she lends the money to her friend at 1% per month.
Now she got Rs.400 from her friend monthly which she started to invest in Mutual Funds. This is a classic example of making your capital work as well as your interest.
After reading several books on personal finance, money management I understood what my mom was trying to do.
What wealthy people Believe
All the above examples bring clarity, which is that one compulsory secret to building wealth is to create assets or acquire assets.
Capital once invested generates interests which makes it an asset. Property rented generates rental income which makes it an asset. When you again invest this passive income from the assets and spend from the interest earned, you will start in the process of wealth creation.
The Wealth Creators know these secrets. They make their capital work for them. They make their income from capital also work for them. The rich believe in working actively but they make sure their income is more and more passive.
Wealth creators make sure they buy companies and leverage their resources to make ample sources of income. They believe in making people working for them as an asset. They treat knowledge as an asset.
Wealthy people believe in this quote – “The single most powerful asset we have is our mind. A mind trained well can create wealth”
They invest in themselves to make their minds more powerful, more knowledgeable to get great ideas to generate and create wealth. The mind is really a powerful asset, which can change your destiny.
Read all the good books
- Rich Dad Poor Dad
- The Richest Man in Babylon
- The Rules of Wealth
Ask for any help in the comments section…
My post on Financial Freedom
My Quora Profile: Arjun Sachdev