True Wealth!


So far, we have focused on answering two main questions: “What” and “How”. What we want and how to achieve it. If you reviewed most of the articles, you would find a trace, or link, to either one of the two questions.

I feel it is the right time now to ask “Why?” We rather touched on that in the article titled “What is Wealth”. Today I would like to shed the light from a different viewpoint.

Let us assume that by following the concepts, recommendations, and practical methods spread throughout this blog, you have actually become financially abundant. Why did you want to be among the financially elite? Let me ask you the question differently: What is it that you wanted to do with all that wealth?

Wealth accumulation, for its own sake, is futile. There is an old saying that money is like manure; pile it up, and it would ruin the smell of the whole ranch. Spread it around, and you would get a fertile land.

I suggest that your initial intention should address this question. Elaborate on the dreams you would like to fulfill as you reach your financial intention.

A new house, a new car, kids’ education, money set aside for emergencies? Those are the typical candidates, and there is nothing wrong with working on achieving them.

Yet, there are things beyond the self and the close family. Contributions that stay behind when you leave!

Think about that for a moment, or more. How can you contribute to the education, health, and well-being of those in need around the globe?

In my opinion, the two worst enemies of humankind nowadays are ignorance and poverty.

Have a plan of regular contribution to fight those enemies, as much as you can.

You had a plan of saving 10% of your monthly income to create your wealth. Now is the time to adopt a similar plan of paying back, of spreading the benefits of your wealth.

That is the “Why” behind the “What” and the “How”. That is the “spirit” of wealth. Those who commit to such plans report an amazing observation! Every penny they give away to a noble cause comes back multiplied several times, and sometimes more, depending on the sincerity of the giver.

Make your contributions private, except before those who see you as a role model, especially your children. I promise you if you did, you would feel a sense of peace and satisfaction much deeper and richer than what you would feel if you publicize your charitable activities.

Congratulations on reaching this stage in your pursuit of ethical and worthwhile abundance. I am glad our journey together has come to such pleasant conclusion. It is an end of the articles, but not an end to your work on growing and maintaining your wealth on all dimensions. And to your contribution as a responsible wealthy being!

All the Best,

The Wealth Maker

The Velocity of Wealth Creation


 

What’s the difference between speed and velocity? Speed has only a magnitude, while velocity has a magnitude and a direction. In other words, it’s a “vector” physical/mathematical quantity.

What does velocity have to do with wealth? A lot!

Like it or not, time is an essential variable in the wealth equation. We’ve seen in several places how we could use time to our advantage, as intelligent investors. For example, once you find a “wonderful business”, you don’t pay the “sticker price”. You “wait” till the share price of that business drops low enough to give you a Margin Of Safety (MOS). Please review the first few articles.

The velocity of wealth is the pace and direction at which you move towards achieving your wealth objectives.

There are several factors that affect that pace. Your age, the stage of life you’re currently at (a student, an employee, a family man  a retired person, etc), the geopolitical environment you happen to be in, the influence of your family, friends, co-workers, your upbringing, the level of your self-esteem, the amount and quality of the financial knowledge you have.

At some stages, it’s wise to focus a considerable portion of your time and energy on wealth creation. This would give you the freedom to slow down at other stages, and focus on other priorities.

So your wealth creation velocity changes speed, and sometimes direction, as you move from one stage to another, or as you change any of the factors mentioned above (the list is not inclusive, you could come up with other factors relevant to you).

You could also derive from the above that your financial wealth creation, is but one of your priorities. Hence, it’s essential to have a vision of your life that encompasses all your priorities, values and roles. And a mission statement, which maps out the distribution of all of these elements across your life.

A question may arise here: Can one increase or decrease his/her wealth creation velocity, without negatively affecting other areas of their lives?

Yes they can, but not randomly or abruptly. For example, when your family responsibilities are at their minimum, you can dedicate yourself much more to wealth building (instead of wasting your resources on meaningless activities). This would pay dividends later on, when you don’t have the same amount of free time.

As a rule of thumb, the earlier you start the better. I know people who started investing in their teens. Don’t wait till before retirement to think about your financial future. It would be late, but not impossible. There are always ways to start all over again, and as the saying goes: It’s never too late!

The Wealth Maker