Laws of Riches
Many people dream of becoming rich. However the stark reality is that for every rich man you meet, chances are you come across ten who are poor. Why is there such a disparity? Is it really the workings of lady luck? Or is it just fickle fate at play? Deepak Buxani, a financial planner with Manulife Financial, tries to solve this age-old mystery.
How does a man from poverty rise above the norms of society, refusing to impose on himself limitations of any sort to finally become one of the wealthiest people in the country?
We have all heard of success stories before; from Henry Ford of the Ford Motor Company fame, Sam Walton of Walmart, Andrew Carnegie of Carnegie Steel, and JP Morgan of JP Morgan & Co. In Singapore itself, we have a plethora of our very own self-made millionaires such as Mustaq Ahmed from Mohammad Mustafa & Samsuddin and Ms Olivia Lum of Hyflux. What is it that these men understood about money that we have not? What were their beliefs towards money that led to them amassing such wealth?
LAW ONE: Stop Wasting Money
If you are burning with desire for wealth, the very first universal law of riches states that if a person wishes to be in possession of money, he should simply stop wasting it. To waste money is arguably the biggest financial err that anyone could make. Some people say, "Oh! I have worked so hard today, let me treat myself to a new watch". This is fine provided you don't already own one or the one that you own needs replacement, but buying another watch just to make yourself feel good does not do justice to your money.
During my grandmothers demise a couple of years back; I had a rich uncle who attended the funeral. During the mourning period we had prayers everyday for twelve days. During one of the days after lunch was served to the all the people who came to offer their condolences, I noticed my uncle take out a plastic cup. These are the type of plastic cups that came in packs of 20 or 30, all stacked on top of each other.
Now, at anytime when we needed a drink, everybody including me would just take a cup, fill it up with the drink, gulp it down and discard the empty cup. However, this uncle of mine took his cup, filled it with drink, drank it, BUT did not throw away the empty cup after he was done. Instead, he took a tissue out of his pocket after finishing the drink, and placed it in the empty cup and left the cup on the shelf. Whenever he was thirsty during the day, he took the tissue out, filled his cup with a drink, drank the drink, put the same tissue in the cup and placed the cup back on the shelf. This happened quite a few times.
After a while, I finally got irritated and questioned him scornfully, Uncle! What are you doing? There are so many cups, why can't you just throw the cup away and take a new one? In fact, there are more cups than we need! He just looked at me as if I was the most stupid person on the face of this earth and remarked; "I don't like to waste." With that he casually turned around and proceeded to greet and attend to the needs of our guests.
His remark left a lasting impression on me. I realized then why he was so rich. The fact that he did not waste even a small thing like a plastic cup made me understand the universal law that governs money. This attitude of not wasting was one of the major factors of his accumulation of wealth. This IS the greatest law.
LAW TWO: Pay Yourself Before Anything Else
The second most important law in acccumulating riches is to pay yourself first. Pay myself first? Some might ask, What does this mean? or "I do pay myself because I get paid for the work I do, isn't it? Well, thats not really true. We pay our housing loans, our electricity and water bills, our transport bills, etc. We are paying everyone else except ourselves. Why?
In order to build our castle of wealth, we need to start paying ourselves first. Remember this, money is attracted to money. If a magnet can probably attract 10 iron fillings, a stronger magnet can attract 20. An even stronger magnet can attract 50. The more money you have, the more stronger the attaction, provided you abide by the laws.
LAW THREE: Grow Your Wealth
I have always believed that in this modern age, to make money you need two things; one is money, and the other is time. Rich people don't look at money as money....they look at it like a seed that would sprout and grow to a tree that produces more seeds and hence more trees. The trick is the WAY you grow these trees.
Lets say for example you have invested $1000. Say your return on investment is 10%. You have made $100.Great! Now imagine you have $100,000 invested. Your return is still the same 10%. Now how much have you got? $10,000! This is called the compounding effect. Albert Einstein called compound interest "the greatest mathematical discovery of all time".
By Deepak Buxani
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