The democratization of know-how, skills and information in the digital age has leveled the playing ground for everyone to acquire wealth, regardless of age or pedigree. The ‘multiple-streams-of-income’ culture is at its peak, which makes entrepreneurship the ultimate ladder for escaping the rat race of poverty. The popular opinion that ‘you can’t be rich unless you’re your own boss’ hits home for employees now more than ever, which makes them disadvantaged, and eternal slaves to time, someone else’s business and money.
Multiple reasons exist for this ideology, and they are plausible, because aside from the fact that fixed paychecks are addictive, they give a false sense of security that dissuades salary earners from testing the intimidating waters of entrepreneurship. Also, the fact that you’re entitled to a fixed amount regardless of how much time and creative energy is invested into your deliverables.
For c-suite executives with humongous salaries, fat bonuses and appealing perks, building wealth is different kettle of fish, but employees who have to sweat and slave away to make ends meet seem to always receive the short end of the stick.
At the very basic level, the formula to wealth creation is making, saving and investing money, but since wealth is relative, and the good fortune of wealth is not accessible to everyone, wisdom demands that one adheres to tried and true tips and tricks for the odds to be in your favor.
- Control the growth of your paycheck: Contrary to popular opinion, it is possible to control the growth rate of your salary and eliminate the ‘hand-to-mouth’ struggle. Key actions like skillful salary negotiation, financial literacy, professional development that makes you an invaluable asset, career goal setting, testing your market value periodically and aggressively increasing your income.
- Financial Discipline: Discipline is tougher with finance, but is a crucial part of building wealth that involves a systemic balance between income, expenditure and investments. This translates to curbing lavish lifestyle habits, avoiding bad debts, setting savings goals and meticulous budgeting.
- Emergency Funds & Insurances: Rainy days are sure to come heavy with unplanned expenses, and your survival depends on how much intentionality you put into strategically stacking up cash in your emergency account and insurance plans. This way, the freedom and peace that comes with wealth is all yours.
- Have a diversified Investment risk portfolio (high-low risk): It’s wrong to live in the illusion that you can’t invest until you earn six figures, because there are beginner investment options, ranging from government bonds, money market funds, real estate and stocks (to mention a few). Investments vary in terms of risk and potential return, which is why it is wise to spread your money across different types of investment. This will reward you with the highest return for the least risk. At the end of the day, you want your money to work for you by beating inflation & devaluation, rather than lose value by chilling in your savings account.
On the grand scale of things, there is no one-size-fits-all approach to building wealth. As a matter of fact, people with silver spoons and those who indulge in get-rich-quick schemes could still become bankrupt. Regardless of what wealth is to you, whether it’s earning a high income, having a huge net worth, living a luxurious life or attaining satisfaction on your terms, being an employee shouldn’t disqualify you from living your best life. Your money can still make your world go round as a salary earner.
By Precious Muogbo.