I’ve been hearing the topic lately about wealth creation. It’s relevant because a lot of the people in my peer group have actually succeeded with coming out with their offer that converts, are actually making sales and are now in a surplus, where they’ve actually got revenue coming in less their costs, and then they’ve got their living expenses, and then there’s still some leftover or the business is building up in value. I want to talk about some of the typical traps of entrepreneurs and some of the things that I’ve learned from my friend, Salena Kulkarni, who has a program called Inkosi Wealth.
And that is that most entrepreneurs are really just putting this on the back burner, the whole wealth-creation thing. They’ve been so focused on building the business, they’re not focused on building the wealth. And the question that we really should ask ourselves is, if we stop work today, would our passive income from investments cover our living costs? That’s really the only question that matters. And if you can say, Yes, I’m covered, well done. You’re in the rare minority. If you’re not at that point yet, if you say No, I still have to work. Or I’d would need to sell my business or I need to sell down some of my investment properties, then there’s still some hope for you to make some changes. So what do you actually do? What are the big changes?
I’m not a financial adviser. I’m not offering advice. So this is some of the things that I’ve learned. And I’m just sharing this. This is really just ramblings, my own opinion. I’ve learned that sometimes if we just park cash sitting in a low-yield bank account, it’s really underperforming compared to what it could do if we’d put it somewhere else. Where is the somewhere else? Well, it’s probably not your latest crypto bot that “can’t lose”, because I’d be concerned that it probably could. It’s always good to put your money in different asset classes, apparently, to protect yourself from any one single source of loss. Of course there’s the traditional properties and stock markets, but they’re what’s called efficient markets. They’re highly accessed and pretty competitive.
What are the inefficient markets? That’s the sort of less-known places where the super wealthy people invest. And there are specialists out there who put together alternative investments. And what I’ve been learning from Salena is these are things like becoming the bank, being part of a syndicate where you can put money together and invest in something. You can still protect yourself. This is a really interesting thing. You can get much higher interest rates, but without big risks. So I’ve been fascinated learning about this. I encourage people interested in it to check in with Salena, find out more about it.
The bottom line is we need our money out there working hard for us so that it can pay us a return. And the income or the yield, the amount that it throws back to us, is more important than the actual net wealth. So of course, stage one is to build up some net worth. But stage two is to put it to work. So if you’re listening to this, watching this, and you’re not putting your money to work, now’s the time to get busy on it so that you’ve got the choice not to work down the track. And that’s the phase I’m in now. And I’m sort of really enjoying switching on light bulbs for other people.
Ask yourself that question, could you stop work right now and live for the rest of your life or not? And I wouldn’t rely on a pension by the way, because I think there’s a big cohort moving through into that zone where I don’t expect it to be around when I reach the age where I could draw on a pension, which hopefully I’ll probably never have to, but I don’t think that’s going to be a surplus as it has been. There’s going to be a huge price that has to be paid for this pandemic times, a lot of inefficiency going on in governments and in a lot of our aging population in some markets. So I think we should take that responsibility to be independently wealthy. Good luck.
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