4 MYTHS ABOUT WEALTH
Most people believe 4 myths about wealth; Steve Down, author of Financially Fit for Life argues that the 4 myths about wealth creation can have a lasting impact on people’s financial habits.
1. People are rich because they work hard while poor people are poor because they are lazy.
People living in developed countries work twice as hard as those living in developed countries to ensure money circulation around the economy. For example, a lack of mechanization in agriculture means farmers in developing countries incorporate labor-intensive methods of farming that will make them work longer and harder. Produce from the farms is often too little to be sold. post-colonization, developing countries are still lagging in development due to corruption, poor leadership, and mismanagement of resources.
Compared to more developed economies with highly effective institutions, people living in developing countries have a lower chance to maximize wealth creation as they have little or no resources in ensuring generational wealth is built.
2. An inheritance is a jump-start to wealth building.
While wealth could be passed down from generation to generation, wealth creation skills can only be learned over time to ensure sustainability. Steve Down argues that true wealth is not earned, it is created. Once a person learns the skills of wealth creation, they can create wealth over and over.
Most 21st century billionaires are self-made, with no inheritance — just inventions that made them stand out. A good example is musician and philanthropist, Rihanna who is currently the world’s richest female musician. Her talent and recent business ventures have seen her rise to the top.
3. Save and become wealthy.
Saving in a bank earns you 3–4% annually, a fixed deposit account earns you 7–8% annually. Saving hardly makes you rich as you save to spend later on.
Investing your savings can create generation wealth instead i.e investing in equity funds will fetch you about 12–14% annually.
4. Wealth is the same as being Financially Fit.
Being Financially Fit means that you have the money you need when you need it. One can be wealthy but not Financially Fit. Wealth is an abundance of valuable resources or material possessions.
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