Hi, I’m John Drury. I help professional business leaders achieve what’s important without losing what’s essential.
One of the important things that can be eroded away by the busyness of every day is wealth creation. So many people I come across, who are business owners, who have a corporate career, don’t have a wealth creation plan. They’re living well. They’re income is mostly going into their lifestyle. They’re enjoying that, but the challenge is, that if you own a business and you’ve got a good income, then a portion of that must be going into wealth creation.
Not just when you’re 50 and need to think about retirement, but earlier on than that. You know if you start, at say 20, put aside 160 dollars a week at 5% interest, you’ll have a million dollars by the time you’re 60. It’s just that simple.
The best wealth creation strategies involve putting aside a little bit regularly and it compounds over time, and the beauty of compound interest, we become wealthy. That’s the best way to do it.
But not many of us have disciplines or the strategies in place to do that. See, I would encourage you to put aside at least 10% of your income into a wealth creation plan. The first thing you need to do is clear away any credit card or other unsecured debt. Put that money aside and deal with that as quickly as you possibly can because it’s eating away your life.
Back in the 1970s, when credit cards came in Australia, the whole mentality of buying now and paying later, and using other people’s money at interest, is the way we began to think. It’s a really unhelpful way. It undermines wealth creation.
What we need to do is get back to saving and building income, building wealth, and doing that by buying property, or buying shares, or other things that grow in their asset value over time. And that’s the best way to grow wealth.
You can play with Bitcoin and other things. Say you’ve got $5,000 that it doesn’t matter if you lose, you can play with the get-rich-quick kind of schemes with that kind of money. But don’t use it as a wealth creation strategy because you may win but most likely you’re going to lose.
So, one of the other things is if you’re a business owner, then why not look at how you can buy or purchase the premises that you’re in. So that rather than paying rent, you’ve got an asset building there for you as you run your business, and there’s tax deductions related to that as well.
So, are you spending all your cash flow on your lifestyle? Really good question. I would encourage you to put aside at least 10%. The older you are, the more you need to put aside.
Pay off your unsecured debt, number one. Secondly, carve out that 10% into savings and then put it into property, or shares, or other income that’s going to grow over time. And then little by little, over time, you’ll become wealthy, if you start now.