How personal wealth can be build?

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There is a myth that wealth building means earn huge money and live a high standard life. But the concept is not true always because a highly earned people can flat-out broke for any of sudden reason.

You may found in financial news and hear that almost every day many of well established big organizations are closed for their cash flow or financial crisis and naturally related people of this organizations like the owner, employee lose their wealth just in a moment. But think once they are millionaires or billionaires or high pay employee. Not only organizational but also the highly earned persons like the celebrities who earn millions are in financial crisis and even they can’t repay their debts.

If you think bit deep and hopefully you can see that the reason for all above is simple. There are four steps to keep your wealthiest, if miss to follow any of the following steps will destroy your wealth. Earning money is just a part grow wealth and staying wealthy.

I am not going to drive your car back, I just try gathering the basic steps of wealth building in one place in here to provide a structure which make you understanding how money works. Let go for discussion without wasting our time wealth.

  • Capital Formation: Most of people figured out this the first part to being wealthy. In reality, its true to getting money on hand is in the top place. But vast majority of humanity thinks that they can found this by manage or getting a job. Rest of other running or owning business or have income generating assets to found or gather capital. So this is the beginning and the examples are: manage a job, dividend stocks, and loans.
  • Protect capital: Economically capital loses 3-10% of its value with time in every year at most of countries. You pay taxes on your every dollar that you earn. Investing in a risky market or product can completely collapse your capital. Your earnings spends in many ways like paying debts, rent or mortgage, food cost, obligation and many other costs. You need to control over to cut those cost as much you can. As a example: if your earning 100k per year but you spent almost like 90k but he/she who earn 50k but their expenditure is 30k per year is in the better position than you.
  • Saving Capital. Savings is most important here because without have any savings you can’t move forward. A modest savings can help you to take any steps to find out other comfortable extra earning avenues without having any loan or debt.  All though your own financing can make you free from any pressure to repay or adjust your loan or debts.
  • Investing Capital. Investing your savings is essential to generate more income. Investing in property can be the best investment way. You can also put your money at bank as fixed deposit for a certain period on monthly earning condition. You may buy dividend stock or run a small business. Those investing sources will help you to increase your earnings. Hopefully those investment ways drive your investment in the safe road.

You may feel at the end of the reading that those steps are so easy but you are wrong. Those are not easy that you thinking, it may take several years to complete all the steps successfully. Dedication may help you to fulfil all the steps successfully. You must set your goal to become a wealthy in your mind. And this will reach you the end of road.

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