Bank al Etihad · Follow
Published in · 4 min read · Jan 25, 2024
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Imagine how much better life would be if someone transferred a million JOD to your account through CliQ! Sadly, the chance of that happening is almost nonexistent. And, in any case, CliQ doesn’t allow transfers that large.
We know it may seem that wealthy people live in a different world, far from the financial worries many of us have. You might think that there are secrets to joining the ranks of the wealthy, but the truth is that wealth comes from understanding the world of money and smart financial planning.
We all dream of becoming wealthy. However, wealth isn’t only about earning more money. The way you think and plan every day, the habits in your routine, how you manage your money, where you put it, and so on, are all equally important on your journey to wealth.
And now that the topic has caught your attention, let’s reveal some secrets of the wealthy. You might be the next millionaire one day!
The wealthy grasp the importance of time, especially when it comes to investing. Even small investments can grow into significant assets over time. That’s why they start investing early rather than waiting.
For example, if you invest 10,000 JOD at the age of 25, you could have around 217,000 JOD by the time you’re 65 years old, assuming an 8% annual return. However, if you wait until the age of 35 to invest the same amount, you would only have 101,000 JOD by the time you’re 65 years old.
The wealthy also understand the significance of time in their spending decisions. Have you heard about the billionaire who bought a private jet? When asked about it, he said he considered it the smartest purchase he had ever made. Despite its high cost, it saved him a lot of time, and in his view, time is the only asset we truly lack.
Climbing the corporate ladder might boost your monthly income, but it won’t lead to wealth. Eventually, you’ll hit the maximum income unless you become the CEO of a major global company!
A harsh truth in our world is that working hard doesn’t always translate to wealth. If your only income comes from a job where you’re paid for your time, your earnings are limited by the hours you work during the week. So, instead of working for money, let your money work for you!
The wealthy understand that the real path to building wealth involves earning passive income, which is money you earn from ventures where you have no direct involvement. Whether it’s investing in stocks, renting out real estate, or silent partnerships, anything that brings in profit with minimal to no effort works to increase your earnings beyond the hours of the day.
You might be wondering: “How is that possible?” Let’s break it down for you! Imagine winning a one million JOD cash prize and using it to fulfil all your dreams, buying a house, a car, and more. However, after 3 years, you find yourself completely broke. In this case, you’re no longer wealthy!
True wealth and maintaining it go beyond simply having money. If you lack the right financial mindset, achieving lasting wealth becomes unlikely. To earn money and become wealthy, you must train yourself and develop the mental and financial skills needed to manage your money wisely. This ensures its growth and prevents you from making poor financial decisions that could leave you broke.
Some think that accumulating wealth comes from being extremely financially cautious. However, many wealthy individuals understand that not taking risks can be the greatest risk of all. Assessing opportunities and taking thoughtful risks can open doors to substantial financial gains. This might involve investing in a startup, entering a new market, or making strategic business decisions.
However, let’s not overlook the importance of risk management. Whether through diversification, insurance, or a thorough analysis of potential outcomes, balancing potential gains against potential losses is essential. While not every risk leads to success, the ability to recognise and study opportunities is a key characteristic of successful wealth-building strategies.
The saying, “You have to spend money to make money,” might sound like an excuse for excessive spending, but for the wealthy, it’s a golden rule for building wealth. The key is leveraging borrowed money to grow wealth.
Contrary to common belief, the wealthy also borrow money! Here’s the secret: they make use of these funds strategically. Rather than using their own resources to finance a project, the wealthy opt for loans, using the bank’s resources. This enables them to leverage other people’s funds to generate additional income while keeping their own capital intact for other investments.
So, making the most of good debt for financing investments and assets expected to grow in value while avoiding bad debt used for assets expected to decrease in value, is a common strategy among the wealthy.
Becoming wealthy doesn’t happen overnight, but you can consistently grow your wealth over time by handling your money responsibly. Adopting smart strategies, actively seeking new opportunities and income sources, and focusing on long-term gains are key steps in this journey.
