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Editor’s note: Ken Doghudje, the financial expert contributing to Naij.com, shares the sixteen main principles that helped him take the path of building wealth. Don’t wait for the new year to come, start changing the way you think about money today.
The current year is gradually coming to an end, and for a few it’s been an extremely eventful and successful time. Unfortunately, this view is not shared by the majority who have gone through loads of financial challenges in 2015.
One thing that is common is the uncertainty that the new year brings. Will 2016 be a better or a worse year? No one knows. This normally brings a certain level of trepidation as one prepares to face the challenges of the new year head on.
I’m not a prophet or a soothsayer who can accurately predict what will happen to people financially in 2016. What I do know is that making money or building wealth next year and beyond is down to a series of actions and steps that will work for anyone if properly applied. How do I know this? These were exactly the steps I used in the last couple of years to increase my wealth.
Now strategy is a military term that depicts a plan, method or series of maneuvers for obtaining a specific goal or result. It has its origins from the Greek word “strategos” meaning to lead an army. Below are sixteen maneuvers, in no particular order, that if applied will help one build wealth in 2016.
Pay yourself first: In order to build wealth you cannot afford to spend everything you make on your expenses. Even though your expenses exceed your income you must imbibe the practice of keeping a portion aside that can be invested to produce more wealth for you. Failure to do this means nothing is left to be used as seed capital to grow wealth. Endeavor to keep aside at least ten percent of your monthly income towards taking advantage of opportunities to build wealth in a separate account.
Create an emergency fund: You must keep some funds aside to take care of life’s emergencies. An emergency fund should consist of six months to a year’s living expenses. Keep this money aside to take care of sickness, job loss or any other situations that can put pressure on your finances when they occur. This prevents you from diverting monies meant to work for you and using them to meet pressing needs. Ideally you should save at least ten percent of your income in your emergency fund till it reaches the equivalent of at least six months of living expenses.
Use the power of affirmations: Your mouth is a major tool that must be deployed when creating wealth. Even the Bible declares there is power in the tongue. What you say becomes reality in your life. Speak words that create wealth and wealth will appear. I created an affirmations document, starting every financial goal I desired with the words “I am,” and made declarations in the morning and evening. I eventually began to make progress as what I said began to come to pass.
Personal development: According to Charlie “Tremendous” Jones: “You will be the same person in five years as you are today except for the people you meet and the books you read”. Bill Gates, who has been amongst the richest people on the planet for the last thirty years, continues to read and develop himself, and you should too. The truth is you can never control plenty of something that you don’t understand. You must spend time studying the subject of money, how it works and the rules and laws behind its acquisition. I have personally studied fourteen books on the subject of money this year which have helped make me smarter about its acquisition.
Start a business on the side: To become wealthy in challenging times necessitates engaging in more than one activity to generate income. One income stream is hardly enough to meet all one’s needs and wants and also make wealth. This is why it becomes imperative, especially for those who are employees, to start a small business on the side. There are several small business ideas that one can choose from that can be run in one’s spare time. I encourage you to start something on the side if you have not done so already.
Upscale your existing business: This year I constantly sought ways to increase the earnings from my current business. Your business might be profitable but it can still do better. I make bold to declare that you are not yet the top earner in your line of business, so there’s still a huge room for improvement. You should seek for ways to expand your offerings, cut costs, or even increase patronage from existing customers and find new ones.
Turn your passion into profit: Everyone’s passionate about something. The truth is we would probably do what we are passionate about for free. There is however nothing wrong in earning money from your passion. For example I am passionate about books and I recently decided to become a writer and publish books for money. Every time someone buys my book I am getting paid thus turning my passion into profit. You can do the same. Find your passion and try to monetize it.
Invest for cash flow: Cash is king. It enables needs and wants to be met, and dreams and aspirations to be realized. It makes savvy business sense when you are trying to build wealth to invest in things that will generate daily, weekly or monthly cash flow. This should be your main investment strategy instead of investing for capital gains at this stage, investing in things that you expect the value to increase later such as stocks, mutual funds, land etc. When you have a positive cash flow then you can use the proceeds to invest for capital gains.
Have a problem-solving mentality: My favourite definition about money is that it is a reward for solving problems. The more problems you solve the more money you will make. The richest people solve problems for the largest amount of people regularly. So stop focusing on money, instead focus on solving problems for as many people as you can, and money will be the end result.
Be idea-driven: In 2016 you must also be driven by ideas. Ideas are the foundation to wealth. There is still room for discoveries, innovation and improvement. We need to question what we currently have with a view to seeing how we can make it better. Ideas drive innovation that can be converted into income and wealth.
Start small and start now: Stop procrastinating! The perfect time to start doing something to build wealth is now! Procrastination is currently one of the biggest barriers limiting people from starting on the road to wealth. Don’t even let a lack of finance hold you back. Start on a small scale and keep taking small steps on a regular basis. Things will definitely pick up!
Study the rich: I usually spend a fair amount of my time studying the rich in order to better understand how they operate. Studying the rich grants access to the things they did to make wealth, which if applied to your situation will cause the same to happen to you. To get a better perspective on how to become rich you must study rich people.
Make use of good debt: Good debt, according to Robert Kiyosakiб is simply defined as debt that is invested in a venture that produces enough cash flow that it can eventually pay off the debt and generate income. It is essential that one does due diligence seeking opportunities before going into debt.
Have loads of attitude and belief in your abilities: While there are no physical differences between the rich and the poor, there are fundamental differences in attitude, belief and approach to issues. These qualities are intrinsic to all individuals, however, they do make a huge difference in the results achieved. There is an attitude that leads to riches and one that leads to poverty. You will need to invest time to work on your attitude and replace the wrong attitudes with the right ones if you want to build wealth in 2016.
Picture yourself as wealthy: Everything you want to achieve starts from the mind. The mind is the soil where you plant the seeds of your wants and desires and it begins to create thought patterns and ideas to make these things reality. Make out time to think daily about what you want to achieve or become. In fact putting up pictures of your goals are an excellent tool in visualizing. What you think about longest eventually becomes strongest in your mind and life.
Persevere and keep going: The road to wealth is littered with roadblocks and potholes, don’t you give up. There will be losses and there will be mistakes made and lessons learned, persevere and keep going. Nothing good comes easy. Keep learning, keep striving and things will definitely take a turn for the better.
2016 is fast approaching and the ball is in your court to make it your best year ever financially. I personally guarantee that if you apply these strategies you will make tremendous progress on the road to wealth. These are universal laws and will work for you anywhere and anytime. I look forward to receiving word about your tremendous success in 2016.
Kenneth Doghudje is currently the managing director of GfK RT Nigeria, the West-African subsidiary of the fourth largest market research agency in the world. He promotes Moneytalk and is the author of Money Lessons: Practical Guide to Wealth and Fortune, a collection of his articles on various aspects of personal finance, saving, investing and wealth-building. Reach out to him on money@moneytalkng.com, via Twitter @moneytalkng or Facebook.
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