15 December 2019
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How to grow your wealth

Peter Switzer
24 August 2016

Now before you start shooting me with your Twitter gun or feedback email, even if you are not interested in being rich, it’s a fair bet that most people would love to end up rich.

It could be by design or by accident, but the words of the great comedian, Sophie Tucker, still ring true: “I’ve been rich and I’ve been poor. Rich is better!” (I know Billy Connolly made this famous recently in an ad for a bank but it was not his line.)

Plan for wealth

So assuming I’m right, let’s create the plan for being richer, or at least richer than you are likely to become without a blueprint for money success. For that’s what follows.

1. Dream big and write it down.

Nominate an amount you’d love to earn each year or have in retirement. Find out what jobs pay the money you want or look at the businesses out there that could give you the weekly income that will put you on the road to deep pockets.

If that does not appeal because salaried jobs aren’t as rewarding as you would like until you become head of marketing or CEO, just write down that you want to be wealthy and be prepared to be reminded about it every day. You don’t get rich overnight but daily. It’s a habit.

2. Study the person you want to be like, but promise yourself you will be better.

If you want to get richer by being a CEO, a politician or an entrepreneur, read about them, study them, and start making changes so you go from being normal, which will give you average wealth, to become abnormal, which will deliver you above-average wealth.

3. Put your current house in order as most normal people live their lives in tolerable chaos.

They have loose plans about what they might want. They don’t do a budget to see where they are spending and to see where they can save.

They often have expensive home loans, credit cards, shop in pricey areas and largely make it easier for others to get rich on their lack of planning.

I will concede that some smarties actually spend big to win big. Some real estate agents stretch themselves to wear the best suits, drive the best cars and eat at the most upmarket restaurants to emulate the role models they aspire to.

I know it sounds a bit much, but I praise these people for at least having a plan and being committed to making it happen. (I guess they can always say that if they fail, they had a great time to doing it!)

4. You have to have a financial plan.

The irony is that someone like the highly successful author and money coach, Robert Kiyosaki, of Rich Dad Poor Dad fame, makes the point that few people numerically get rich via a job.

Sure a good number do, but the percentages are quite low compared to entrepreneurs and investors.

I remember vividly sitting on a beach on the island of Sifnos in 2008 in Greece and reading the BRW rich list, and being the kind of guy I am. I looked for a common link between those on the list.

Few were CEOs from public companies unless they started a private company that went public.

The common links were that they had started family businesses and had made a lot of money out of property.

Kiyosaki is a big advocate of using the tax system to help you grow your property empire. He accentuates the importance of using good debt — tax deductible debt — rather than bad debt, which clearly is not tax deductible.

This is certainly one way to skin the “I want to be rich” cat and works well if you are a high-income earner and your partner is too, and you are paying a lot of tax.

But it’s not the only game in town. I know people who have grown their wealth by buying the worst house in the best street and then they have renovated it and sold it for a nice profit and then done it all again.

They might have had a plan — there’s that key word again — to buy in gloom such as 2008 and sell in boom such as 2015, which underlines the high value of having a strategy to collect the dollars over time.

As I have said, you don’t grow rich overnight but daily. It is a daily habit.

5. Keep really good company and these people will give you insights and even direct help that will make your passage to wealth miles quicker.

Gerry Harvey said when he was young he used to meet up with businesspeople weekly where their collective knowledge was an enormous benefit to his business education.

The legendary friendship between ad guru, John Singleton, and Harvey, was mutually beneficial to both these huge wealth accumulators.

When young people in business or newcomers to self-employment ask me what they should do to ensure success, I regularly say, “get a great accountant, a great business coach and a great financial adviser”.

They will cost you money, sure, but they will make you money and open your eyes to better ways of building a business, leveraging legally off the tax system and then help you to invest the profits to ensure the hard, as well as the smart work, translates into a great nest egg.

Be realistic

What I have shared with you is a tease. I am teasing you to be realistic about yourself and what you really want. We are mostly programmed to be good people, but average people who will do OK and will be pretty happy.

If you want more, you will have to be different. And if you are really smart, you will try and do it while creating a great and happy family. That too might need some planning and some really good people around you to make happiness happen.

Do the research

Without doubt there are great books such as Richard Branson’s Losing My Virginity that can show you how you build a business brand. There are also great books and websites on how to grow money.

You are reading one now and my www.switzer.com.au is another one. And there are great books that help you grow yourself and happiness as well — John Maxwell’s 21 Irrefutable Laws of Leadership is one such book.

A blueprint for success and wealth

The greatest threat to someone’s unstated goal of ending up rich is someone’s lack of commitment to that goal!

Commit to success

Bottom line is if you commit to success using a blueprint like the one above, both the dollars and happiness can be the dividends. The critical issue is that you have to really want it and be persistent until shows up.

The US president Calvin Coolidge, who was not known for his inspirational oratory, once came up with this pearl: “Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

Take this on board and be successful and if you want, wealthy.

If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.

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