Share on facebook
Facebook
Share on twitter
Twitter
Share on email
Email

Six laws of wealth

Last of 2 parts

In my last column, I expounded on the first three laws of wealth. I hope it has provided some enlightenment or stimulated discussion among you, dear readers. Let me now cover the rest of this topic.

Law # 4: Don’t speculate in get-rich quick schemes. In my previous column, I issued a warning not to fall for offers that promise very high returns with supposedly little to no risk. Simply put, there is no such animal. Let me again reiterate that yields are directly commensurate to the investment instrument’s level of risk. If you want to potentially earn more, be prepared to take on a higher investment risk, and vice-versa. If somebody representing an unfamiliar firm approaches you with a proposition that, in exchange for your money, you can earn, say, 3 percent to 5 percent a month, ask him why that company does not simply borrow from a bank that will charge much less. Why should any business want to incur a higher cost of funding? It simply doesn’t make sense. You should also ask for that company’s SEC-issued authority to solicit investments from the public. If such a document cannot be produced, walk away!

That said, however, why are so many people victimized by investment scams? Aside from ignorance or not exercising prudent judgment, it also has to do with wanting to be instantly rich. In reality, legitimate wealth-building takes time. The only exceptions are if you win the lottery, inherit a fortune, or marry into money. Be patient and don’t be overcome by greed. Let the time value of money get you there by giving yourself a longer horizon for your funds to grow. Invest in solid schemes or businesses that are good and dependable for the long term.

Law # 5: Invest in yourself. Gain knowledge and skills that increase your earning power. Education is the ultimate enabler. The first investment you should make is on honing your abilities to understand and learn how to navigate in the financial ocean. The late management guru, Peter Drucker, in his book entitled, “Managing in the 21st century”, postulated that, in this age of massive information literally at our fingertips, the most important capability is “knowing what to know”. Allocate time and resources, therefore, for relevant personal and professional development. Be knowledgeable and well-informed through continuing education. Acquire more wisdom by conversing with others who are proficient in their respective specializations. My own advocacy for risk management and financial preparedness covers a lot of interrelated economic and behavioral fields of study, which is why I regularly consult subject matter experts for their insights and perspectives on protection, wealth, retirement and legacy planning, to name a few. Moreover, there are organizations that conductfinancial literacy programs. In my own classes at RFP Philippines, I see a growing number of participants taking the accreditation course, not for career enhancement but for personal knowledge. It’s an encouraging sign. In the words of Benjamin Franklin, “An investment in yourself pays the best interest”.

Law # 6: Safeguard your growing fortune. An unexplained explosion many years ago in a Makati shopping mall led to the deaths of 11 people, who just happened to be in the wrong place at the wrong time. It got me to thinking: what if one of those victims was the most successful investor in our country? What good would all his money-making expertise be if he was tragically cut down at the peak of his life? It jolted me to the realization that two indispensable factors are always needed for financially security – the ability to create as well as the ability to preserve wealth. Someone who only engages in accumulating wealth but does not give equal regard to safeguarding it is at risk of failing. This makes the insurance profession greatly relevant and meaningful. It is the role we play in protecting the financial well-being of families. The lesson, therefore, is to diversify your investments as well as insure your financial assets against loss of time. Both are essential for safeguarding your growing fortune.

This completes our discussion. I encourage you to read and research more on this subject. May the six laws of wealth be a springboard for your own efforts to attain financial success and freedom.*

Share on facebook
Facebook
Share on twitter
Twitter
Share on email
Email
ARCHIVES

Read Article by date

August 2021
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031  

Get your copy of the Visayan Daily Star everyday!

Avail of the FREE 30-day trial.