Creating wealth is considered by many as the most difficult thing on earth but this is interestingly not true.
Many has concluded they will never be wealthy in their lifetime. But is it really difficult to master the secret to create wealth and ultimately build long lasting wealth and prosperity? No! Creating wealth is far more simpler that you ever thought, if only you can follow the realistic and practicable approach.
Obviously there are millions of articles and tutorials out there on how to create wealth. No doubt about that but, are these tutorials and suggestions really practicable? Have you been able to create wealth by applying anyone of these suggestions?
What you are about to read now is probably the easiest approach to wealth creation. It is a clear road map and age defying principle that can work for anyone including you. It doesn’t matter who you are! And, by the time you are done reading this, you will be half way towards sustainable wealth creation. But if after reading this and you are still stocked and confused, then know that your case has gone beyond remedy.
First, let’s try to define what wealth creation means. Wealth creation is the act of acquiring valuable possessions to increase ones affluence and resource control that guarantees prosperity. You are considered to be wealthy when you have so much money and material possessions. Much more than you can possibly spend. It is a state of being rich. Knowing fully well that there exist some people who are not comfortable to being wealthy, I want to state clearly that this article is for those who desires to create wealth and becomes prosperous. If you are not comfortable with that please, read no further!
One thing I want to assure you is that you will start creating wealth after reading this. And the best part is that you can apply this strategy in anything you are doing right now. It doesn’t matter how much you have, you can create wealth using this principle. The principle of compounding.
What Is Principle Of Compounding?
What I want to explain here is similar to the economic theory of compound interest. According to Wikipedia, “Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest. This addition of interest to the principal is called compounding”. Let me explain it this way – Principal is your initial investment, while Interest is your profit on investment. When Interest is added to the Principal the resultant product is Compounding instrument.
Using more practicable compounding illustration, let me explain how you can feed a nation with a seed of corn within five years. I call this formula “Corn Theory”.
1. First Year Experiment
Plant a Seed of Corn this year (at this point a seed of corn is worth almost nothing) then allow it to germinate and nurture it to growth. That one seed will product two heads (ears) of corn with each having about 500 seeds, making a total of 1,000 seeds.
2. Second Year Experiment
Plants the whole 1,000 seeds and nurture them the same way you nurtured the one seed planted last year so that they will be no disparity in productivity. If each produces 500 seeds, you will have 500 x 1,000 = 500,000 corn seeds.
3. Third Year Experiment
Take the whole 500,000 seeds to farm and plant, nurture them the way you did the previous ones. All things being equal, you can expect the same productive harvest. This time, 500 x 500,000 = 250,000,000 seeds.
Now let’s assume that 1million seeds is equals to a bag of corn, 250million seeds should therefore amount to 250bags of corn.
4. Fourth Year Experiment
Since 500,000 seeds produced 250bags and each bag contains 1million seeds, A bag of corn will produce 500Bags of corn in return. Following this order, 250bags of corn will produce 500 x 250 = 125,000 Bags of corn
5. Fifth Year Experiment
Applying the same geometric sequences in the principle of compounding, 125,000 bags with each producing 500 bags will arrive at 500 x 125,000 = 62,500,000 Bags of corn!
These would be more than enough to feed even a hungry nation as big as Argentina. Remember where we started – from only one seed and reasonably expanded to over 62million bags of corn. This is what I mean by Creating Wealth through principle of compounding and multiplication. Can you apply it in your business? This principle can be applied in any business you are doing, it doesn’t matter how small it is. Just as we started this theory with one seed of corn and multiplied it to 62million bags, you can start with $1 and multiply to $62,000,000 by applying the same strategy. It works like magic and it work for everyone.
Why People Are Not Creating Wealth
Imagine your result in the next ten years if you plant one seed of corn this year, harvest two ears, eat all the seeds, reserving just one seed to be planted the following year? Next year you plant one seed again and harvest just another two ears. You wouldn’t produce more than 20 ears of corn put together In the next ten years. Sadly, that is exactly how most people do their business. They invest the initial capital, make some profits, save it somewhere to lay fallow until one problem comes and take the money. They continue again in the same circle.
Wealth can be created only when you are able to maximize your profit through compounding. Invest your initial capital, make some profit, reinvest the profit together with the capital, make more profit, reinvest again and again until you becomes wealthy. Money is not meant to be kept so long in a bank. If you do, the bank will use the money to create more money and pay you nothing in return. Instead, you will pay COT and other charges for using your money to create wealth.
This is what many people are not yet doing, explaining why they are in poverty. Wealthy people like Bill Gate, Carlos Slim and the rest, they don’t keep money laying fallow in the bank. In fact, they keep taking from the bank and adding to their businesses because they know what money can do when compounded. That is the reason they are wealthy. They understand the principle of money and tend to utilize it effectively.
What You Must Do To Create Wealth
Simple! Follow the principle we just analyzed, apply it with the money you have now. Wait and watch it grow like grass and you will become wealthy. Let’s say for instance you have $200, look for a profitable business now and invest it. Before you go ahead, you must carry out due diligence to determine which available investment is profitable. Do not invest base on sentiment. You can as well start a small trade with the money. Make sure whatever you decides to invest in will be a worthwhile investment.
Having invested the $200, work around it to make profit of $100, giving you a total of $300.
Reinvest the $300 to make another profit of $150, now you have $450
Invest the whole $450, make profit of $200. Continue in that process for three years and see what the result will look like.