Be clever about building real wealth
Much as we want people to just be people, the world treats women and men differently. Therefore, women need to approach building wealth differently too.
The most important principle to take to heart, is that wealth is built one step and one decision at a time.
Few, if any, of us will ever win the lotto or inherit a fortune. However, there are enough self-made wealthy women around for the rest of us to know that it is possible to build wealth without a lumpsum falling in your lap. So much depends on the money decisions you make every day.
1. If you only master one financial concept, make it the time value of money.
It means, simply, that every rand you save today gets more valuable over time. The more time you give your money to grow, the more you can benefit from compounding interest, even if you’re just saving a small amount. Wealthy women know that small, consistent increases in their savings plan add up to big bucks in the long run.
2. Use technology to avoid financial slip-ups.
With the press of a few buttons, you can check your bank balance, put spare change into investments, and get bills paid without even thinking about it. Money-smart women set aside time to review their finances, automate what they can and then let the technology do the work.
3. Be smart about debt.
The flipside of wealthy women’s debt is a powerful asset that will increase in value over time, such as the house she bought with a home loan or a qualification paid for with a student loan. Also, in any debt situation, have a plan for how you’ll pay it off. Clever women don’t pay interest to someone else – they settle a loan as quickly as possible by paying more than the minimum.
4. The one thing all rich women have in common is that they live well below their means.
This one shift in mindset can change your entire financial picture by allowing you to build your assets instead of living from payday to payday. It also means that you don’t spend more because you got an increase or a bonus. Nope, you put that money into your wealth pot.
5. Of course wealthy women spend money – but they know that value beats cost every time.
For instance, a wealth mindset means you buy one beautiful, high quality, expensive handbag for work, and use it just about every day. And you don’t buy cheapies on sale! The same goes for other essentials. Always buy quality that lasts, instead of cheap stuff that falls apart after a month.
6. Rich women know that making money requires two fundamental skills – learning about it and talking about it.
This doesn’t mean starting money conversations with strangers in the street, but you can get a huge amount of value from sharing experiences and getting insights from other money-smart women. If you can get together to talk about books or wine, why not savings and finances?
7. Wealthy women know the value of expert advice.
To be sure your savings is going as far as it can, you might want to consider a financial advisor. If you have a small business or side hustle, an accountant is almost non-negotiable. Leaning on a professional, especially early in your career, means that you get the benefit of that wisdom over the rest of your financial future.
8. According to people who research and write about money and wealth creation, women are in general good at saving, but hesitant to invest.
While saving keeps your day-to-day finances on track because you don’t have to go into debt to deal with an emergency or afford a large purchase, only investing allows you to build wealth. Therefore, do yourself a big favour and shake your investment fears.
9. Wealthy women know that the best investment you can make on your wealth-building journey is in yourself.
Ultimately, wealth will mean nothing if you don’t have the character or wisdom to sustain it. Consider books, courses and self-care as small ways to invest in yourself. The more you invest in learning and growing, the more you will have the tools necessary to continue building wealth.
10. Wealthy women protect themselves and their financial rights.
Examples are putting a prenuptial contract in place before you get married, having your own bank account and investments when you are in a relationship, and always knowing what your net worth (the difference between your assets and liabilities) is. It is impossible to build wealth if you leave your financial matters in someone else’s hands.
We can summarise these 10 points in one, overarching principle: to become a wealthy woman, you must manage your money intentionally. From being disciplined about having a budget and sticking to it, to keeping your debt low and considering every spending decision against your goals, building wealth comes down to the choices you make very day.
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