How to secure your financial wealth

By LEAH KARIMI

To many people wealth is determined by an individual’s level of income but rather by a combination of that person’s age and net worth. Each factor below plays an integral part in the means by which you can achieve your evitable financial wealth.

Live well below your means: Contrary to popular belief, saving is the foundation of wealth. Careless consumption habits that are void of luxury-car purchases and fabulous clubbing may impress the neighbor or your friends, but then, impressing the public isn’t the goal of most first-generation millionaires. Financial independence is.

Allocate your time, energy, and money efficiently, in ways conducive to building wealth: you should know how to budget your money, and your time. Anticipate and plan your income and expenses — often as much as a year in advance.

LAVISH LIFESTYLE

Spend significant time researching your investments and by examining ways to increase your unrealised income instead of spending much time researching the purchase of your next luxury car. Believe that financial independence is more important than displaying high social status: You should understand that too much consumption and high levels of domestic expenses will impress people, but these status expenses carry a highly negative correlation with one’s true net worth.

You shouldn’t be interested in posh vehicles or showy products. After all, it is much easier to appear wealthy than it is to be wealthy.

Your parents should not provide economic outpatient care: Statistics demonstrate that the more financial assistance an adult child of affluent parents receives, the less likely it is that, that adult child will become financially independent.

Generally speaking, the more money adult children receive, the fewer they will accumulate. This money will, more often than not, simply generate higher levels of consumption.

After all, it’s much easier to spend someone else’s money than your own. Let your adult children be economically self-sufficient.