We know many successful people and it is often our desire to achieve the success that our idols have achieved. However, matching success is not an easy thing, even though we may follow their footsteps.It is not about acting or doing things but is more about absorbing the wisdom and implementing this wisdom to our lives. In this article, we fathom the minds of a few great personalities and bring to you the pearls of wisdom on being and living wealthy.
"If a rich man is proud of his wealth, he should not be praised until it is known how he employs it." - Socrates
Being wealthy in itself is not something to be very proud of. After all, wealth can be acquired by a variety of means or even by luck. The real question is how you manage and employ your wealth. Great fortunes can be wasted or lost or kept idle with the passage of time. Wealth can act as a great tool or medium through which one may pursue things that lead to value creation in money or in kind. When it comes to investing too, employing money rightly is critical as wrong investment decisions will only erode your wealth over time. There is a risk that you may also lose opportunity to build your wealth. Often, the risk is not doing anything is higher than doing something. Socrates thus believed that a person would be better praised for what he is doing with his wealth rather than how much he holds.
Socrates (470-399 BC) was a classical Greek philosopher and credited as one of the founding fathers of western philosophy.
"If you know how to spend less than you get, you have the philosopher's stone". - Benjamin Franklin
At the heart of wealth creation is the idea of spending less than what you earn. Another way to look at it is that a money saved is money earned. This sounds very easy and often heard. But in practice it can be hard to do and hence the need to remind ourselves of it again. With higher spending, most of us find ourselves left with reduced savings and high debts in present times and an already committed future income. This a big alarm to us all and big hurdle in creating wealth. Financial discipline and controlled consumption are very important if one ever dreams of being wealthy.
Benjamin Franklin (1706 -1790) was one of the Founding Fathers of the United States and also known as the 'The First American'. A very dynamic personality whose image is visible on 100 dollar bills, he was an author, printer, politician, scientist, musician, inventor, civic activist and a diplomat.
"Individuals who cannot master their emotions are ill-suited to profit from the investment process." - Benjamin Graham
Our emotions can blind us while taking important investment decisions. Human nature is highly driven by fear, greed & hope which deviates us from taking the right decisions. Truly, a person who is emotional cannot practice decision making with objectivity, patience and common sense. Decisions taken in emotion would generally be self destructive. For success in investing, is is important to be able to shut down the emotional part within ourselves. An unemotional & disciplined investment approach,is a key to building long-term wealth.
Benjamin Graham (1894-1976) was a British born, American economist, professor & professional investor. He is regarded as the father of 'value investing' approach and had many great followers, including Warren Buffett.
"You only have to do a very few things right in your life so long as you don't do too many things wrong". Warren Buffett.
Creating wealth is easy and can be done by any person. It is also something that does not require one to be an expert stock analyst or to be very informed or something that requires lot of effort. The simple, basic and yet powerful principles of wealth creation like investing in right asset classes, investing for long term, keeping emotions at bay, etc. can really help create true wealth. One doesn't need to be expert product choosers or market timers to create wealth. The way and the amount of wealth created by Warren is a testimony to this fact. As long as we follow these basic principles and not do something very stupid that wipes out our wealth, we will be well off. Avoiding mistakes is thus more important and something that we should all keep in mind when we make any financial decision.
Warren Buffett (born 1930) is an American business magnate, investor & philanthropist. Widely regarded as one of the most successful investors in the world, he is the chairman and CEO of Berkshire Hathaway and is among the richest in the world. He is known for his long-term and value investing philosophy to create wealth.
"Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves." - Peter Lynch
Markets are highly volatile in nature. Market fluctuations often cause investors to change their investment plans. Often we try to time the markets and move in and out of investments to profit from the market movements. However, it is almost impossible to predict how markets would behave. By attempting to do so, investors often also lose out on the returns they could have earned had they stayed put. Timing the market should never be the objective of an investor as it is the business of a speculator or a trader. Frequent changes in portfolio also comes at a cost. It is thus better to channel our energy to earn realistic returns over a longer horizon rather than aim for short term benefits.
Peter Lynch (born 1944) is a stock investor, author & a philanthropist. He earned fame in the investment world with his success as researcher & fund manager at Fidelity Investments.
"Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game." - Donald Trump
Another truth about becoming and staying wealthy is doing what you like most. It would only mean that you are doing something with passion and something that you are willing to learn and only become good at. At the heart of it you are not really chasing money but making money follow you by being good at what you are doing. It is also something that will ensure that you are on the right path and with much greater possibilities to create wealth in future. Further, money can be used to keep track of how well we are doing, acting as a tool for reference and comparison in many ways. When it comes to wealth management, the joy of managing and seeing your wealth grow over time would perhaps give a greater satisfaction than from just holding a fixed quantum of wealth. There is a strong case for you to start liking the process of wealth management today.
Donald J. Trump is the 45th President of the United States, (born 1946) is an American business magnate, real estate developer and author. His lifestyle and the role in the famous reality show 'The Apprentice' on NBC made him a celebrity.