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LOUISE FAIRSAVE: Pursuing wealth


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LOUISE FAIRSAVE: Pursuing wealth

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We have established that real wealth has at least three prominent elements – a significant amount of net assets; sustainability in the long term; and a strong spiritual dimension. These three elements are essential in any situation of real wealth.
We had said that a millionaire would generally be considered to have accumulated a significant amount
of net assets. Yet, it is better to relate the size of the net asset position to the level of income earned and the cost of the person’s normal/expected lifestyle.  
For example, you may strive to accumulate your annual income value in net assets for every five years of your working life. Eventually, you would have accumulated many multiples of your annual income and so be in a better position to generate net income from your assets, which may replace your need to work.  
An alternate measure like this may gauge the wealth of a person like Rihanna more appropriately. She wouldn’t count as being wealthy if she only has a million dollars. That amount is nowhere near her annual income and certainly cannot support her lifestyle.
Long-term investments
It takes great discipline and forbearance to save and invest, especially when your friends are spending and having a good time. One of the greatest ways of generating wealth is to live modestly during your youth. The use of the time value of money in making prudent long-term investments with your savings can mean real wealth later in life. How many young people have the spiritual fortitude to make this choice?
A further point on the spiritual aspect of life is about the big spender, the conspicuous spender. The big spender tries to impress his neighbours by spending more than they spend. His implicit proposition is that he is wealthier than his neighbour since he can afford to spend more.
What folly, founded on ideas of comparison, jealousy and envy! The true question is – is there real merit in the spending? Indeed, there may not be. The big spender does not appreciate that one certain way to have money is not to spend it.
Once you have laid hands on funds, hold on to as much of those funds as is comfortable. Another way to look at this same idea is that the people who have “money”, have “money”, do not spend it readily.
They are often considered mean in their spending.
Wealth is elusive. Many strive to obtain wealth. Some of us are headed in the wrong direction. There are many successes, yet those who succeed may not be considered wealthy by society’s warped standard of conspicuous spending and other signs of apparent wealth.
The successes may live right next door to us. They are able to hold on to more of their income than they consume. They wisely manage their income. They are not envious of the big spender. The truly successful accumulator of wealth tends to be relatively modest, disciplined and content.
Do you seek to be wealthy? If so, how are you currently measuring up? Now you may be in a position to reconsider what is real wealth. Maybe certain adjustments to your lifestyle and spending are required. Doubtless, the most important and fundamental changes will relate to the spiritual aspects: “For as he thinketh in his heart, so is he.” (Proverbs 23:7)
• Louise Fairsave is a personal financial management advisor, providing practical counsel on money and estate matters. Her advice is general in nature; readers should seek personal counsel about their specific circumstances.

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