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It was a
story that happened in the city of Babylon, where there was once the wealthiest
man named Arcad.
Arcad did
not inherit the wealth, instead, he becomes a self-made millionaire by himself.
One fine day, two of his childhood friends approached him to ask how he becomes
so rich while both his friends were also working very hard and still barely
able to maintain their family.
Arcad smiled and told them that while working as a scribe, Arcad was once told the secret of wealth, of a rich man in return for his services.
Interestingly
the rich man guided him to acquire wealth, The rich man shared his wisdom that
you should not spend all the money you earn, rather invest it, and invest it
wisely and this is what Arcad did, he saved enough money to lend to a shield
builder, who then paid interest on the loan, thus increasing Arcad's wealth.
So the
simple secret to building wealth is explained as per the below points.
1.
Save and invest it wisely.
The secret to becoming is not only about accumulating wealth, but it is also about how to invest it wisely.
So, you should also look for investment opportunities to make wise investments.
This is because the money if you keep at home will not increase its value,
even keeping it in the bank will generate only a nominal 2% of interest, and instead,
you have to invest your savings in something that generates more money, such as
investing stocks and stocks that may give 20 to 25% return on your invested money, government bonds, fixed diposit where you may get 6 to 7% interest, which better than keeping the money in the bank as it may yeild good returns over the long period if the principle of compounding aplied, gold may yeld 8% to 12% or more interest depending on the inflation condition of a country and real estate the safest investment on earth with huge returns like 25% to 40% or as a cash flow per month if kept on rent or start-ups businesses, which may yeld returns from 20% to 60% or more if that business works and grows successfully over the years.
Albert Einstein famously said
that compound interest is the most powerful force in the universe. He
said, “Compound interest is the 8th wonder of the world. He who
understands it earns it; he who doesn't pay it.” Who am I to argue with such a
smart guy?
If you want to know more about the power of compounding follow the link below.
https://groww.in/blog/power-of-compounding/
The secret to being financially successful is always to believe how
little you know.
True wisdom lies in realizing how little you know and accept it. The
ancient philosopher Socrates accepted that he does not know anything and that
is why he is considered knowledgeable.
Also, if you want to learn more about investing and how to increase your wealth, please check the my post on the book review on the bestseller book Rich Dad Poor Dad by Robert Kyosaki.
You can only raise money gradually by learning through the process of trial and error, receiving money is a long process that is made up of countless small steps and often has to go through some setbacks.
This is
because the world is constantly changing, especially in the area of finances. This means
that you can never choose a money making strategy, such as investing only in a
certain stock, and waiting for money from it.
The
financial system and life itself is very uncertain, so sooner or later
there will be something massive such as the stock market collapse. That means
you have to adapt to the new situation and learn about new wealth building
strategies.
You need
to experiment and maybe fill in something, and as soon as you discover your
next winning strategy, something big will happen.
But
through this process of experience and adaptation, you will increase your
overall ability to invest wisely as you are gaining more knowledge.
In fact, this process of trial and error is consistent with the way
scientific progress is made:
3.
Learn the difference between making money and receiving money:
Earning money is usually done to achieve short-term financial success, you usually only care about the things you can buy with the next salary, while the future is also a concern. But this kind of thinking has an inherent danger, what if the next salary does not come?
For example, the real estate you purchase will not bring you immediate funds, rather you must first pay the investment or wait for its value to increase. It may take a little time, but once this investment provides money, it works as long as you own it.
This type of long-term planning can help protect unexpected events such as losing your job
To understand this better, imagine that you work as a manager of a
profitable factory, and every month you get a very good salary.
Obviously you are making money, but are you receiving money?
If you want to receive money, you have to go through the process of
saving and investing some of that money.
For example, if you keep saving a part of your income and investing it in real estate such as home or flat and put it on rent, and the rent keeps coming every month without fail, then you will receive money, because your money will be working for you even when you are sleeping or going on a vacation.
For example, if you keep saving a part of your income and investing it in real estate such as home or flat and put it on rent, and the rent keeps coming every month without fail, then you will receive money, because your money will be working for you even when you are sleeping or going on a vacation.
Earning money is usually done to achieve short-term financial success,
you usually only care about the things you can buy with the next salary, while
the future is also a concern. But this kind of thinking has an inherent danger,
what if the next salary does not come?
For example, the real estate you purchase will not bring you immediate
funds, rather you must first pay the investment or wait for its value to
increase. It may take a little time, but once this investment provides money,
it works as long as you own it.
This type of long-term planning can help provide protection for
unexpected events such as losing your job.
4.
Making investments that come back with interest can be highly lucrative.
When you lend money to someone, you can expect them to pay interest for it, and this is one of the important ways in which people with money can get more money just like what the banks do and how are the banks becoming rich and making more money.
To understand that paying interest is a fact of life, you must first
understand that money is a resource like employees or raw materials.
As an investor, interest is an attractive way of building wealth due to
its compound nature, you can get your interest income to grow over time, as you
will be earning interest on top of interest as well.
As you can see, your money not only works tirelessly for you, it also
becomes increasingly effective over time.
5.
How good luck and hard work are related.
Opportunity is a source of good fortune that arises more often, as opposed to chance. How would you define fate?
Many people think that luck constitutes accidental gains, serious
events. But is it really always accurate?
Suppose you are playing in a tennis tournament and you have worked hard for
months and made all the preparations.
Finally, you win the final by placing a clip at the top of the net so that the ball bounces out of reach of your opponent, was it just, coincidence or fate?
Finally, you win the final by placing a clip at the top of the net so that the ball bounces out of reach of your opponent, was it just, coincidence or fate?
Not at all, you have earned that fortune through your hard work.
Real fate needs to be separated by chance, as fate is not really random. Instead, people work hard for it and earn it.
The secret to becoming rich is to reduce your needs to save money, and
to invest a part of it regularly in a way that generates interest for you.
Also, never take a loan to buy some luxury items, because once you find
yourself in such unnecessary debt, it is very difficult to get out of it. If
you desperately desire an item, but can't afford it, save to buy it and invest
wisely.
Never hand over your, hard-earned money to an amateur, no matter how
attractive an opportunity, if the person you are handing over your money is inexperienced in that area, chances are they will fail.
So you should only invest with people who have proven that they know
what they are doing.
The book by Robert T. Kiyosaki on Rich Dad Poor Dad is written and based
on the same principles, however explained as per the present day.