Wednesday, December 13, 2017

Build Your Capacity, Increase Your Wealth

*As published in the last edition of Drive Magazine under the column 'Your Money*


Wealth is often misconstrued as having a lot of money, but money is not equal to wealth. I tag real wealth as ‘Capacity’. Capacity is the ability to hold or contain resources; to effectively manage them. Wealth is the ability to hold and effectively manage limited resources. It’s not about what you earn or have but how you can effectively manage and grow your limited resources.
 The ability to turn one loaf of bread into a bakery and keep the bakery running, turning a loaf of bread and 2 fishes into thousands to feed a multitude is what I call wealth. Do you ever wonder how the first and second servants in the parable of talents were able to double their talents? They are not wealthy because of the amount of resources that was available to them but the capacity they had to double their talents. We often seek for more money but not enough capacity through wisdom.

‘Wealth is the product of man's capacity to think’ — Ayn Rand

King Solomon was extraordinarily wealthy and wise. Wisdom was the only thing he asked from God and in his writings King Solomon lists wisdom and knowledge as the two most important gifts to ask off God. Wisdom and knowledge are what created Solomon's great wealth. ‘Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding’- Proverbs 4:7

‘True wealth lies not in silver and Gold, but in learning, wisdom and uprightness’ — Khalil Gibran

Wealthy people know how to make money, effectively manage and multiply it. With these you can build sustainable wealth.

HOW DO YOU BUILD CAPACITY?
As an entrepreneur you must:

1. Develop a Wealth Mindset: Money is a means to an end and not an end itself. Wealth is not built through spending but through profitable investments. Developing a wealthy mindset requires understanding that the way we spend, invest and manage ten naira is the way we will spend and manage ten million naira. It is not all about how much money you can make but how you can effectively manage and grow your limited resources. Note that you can have overnight riches but not overnight wealth; it is a process.

2. Think Value: As an entrepreneur, value creation is one of the most important steps to building sustainable wealth. This includes finding the thing in you, your products or services that can be of value to others, harnessing it and finding that person or those people that are willing to collect your valuable commodity and give money in return.  People will continue giving you money as long as they get value for it.

3. Get Knowledge: Your personal knowledge is the bedrock of anything you want to achieve. The knowledge you have and keep acquiring is what distinguishes you and your business from the competition. A lot of people want to and can become rich. But only financially intelligent people can become wealthy — and that takes a strong financial education that allows you to build cash flowing businesses and assets. Financial Education involves learning how to effectively manage your limited resources through savings, budgeting, proper expense monitoring and investments.

4. Plan Your Money: Ultimately, it’s not how much money you make that matters but how much money you keep — and how long that money works for you. Every day, I meet many people who make a lot of money, but all their money goes out of their expense column. Every time they make a little more money, they go shopping for something newer or bigger than what they had before, which results in long-term debt and more hard work. Nothing is left to go into the asset column. It’s this kind of behavior that separates the rich from the wealthy. That is why wealthy people in our society are often tagged as ‘stingy’, but they plan their money rather than merely spending to appear rich. The goal of planning your money is to get to a point where the assets you have accumulated can pay you enough of an income to pay for your lifestyle.

About the Writer:
Omotolani Ashiru is a Personal Finance Planner. She has worked in the financial sector for six years and is passionate about helping individuals and businesses plan, manage, invest and increase their resources.  

Contact: 08030964574
Email: omotolaniashiru@gmail.com