Walter Okpala: First Quarter Result

Walter Okpala: First Quarter Result: The first quarter of 2016 ended in March. Have you checked your result for the first quarter? Is your result positive or negative? I will l...

First Quarter Result

The first quarter of 2016 ended in March. Have you checked your result for the first quarter? Is your result positive or negative? I will like to have your input on this.  

Walter Okpala: Happy Easter!

Walter Okpala: Happy Easter!: I wish everybody a Happy Easter Celebration!

Happy Easter!

I wish everybody a Happy Easter Celebration!

Walter Okpala: Common mistakes for wealth creation 3

Walter Okpala: Common mistakes for wealth creation 3: In my last post, I wrote the misconception that wage increase adjusted inflation is a bad way to think about wealth. In this post, I will t...

Common mistakes for wealth creation 3

In my last post, I wrote the misconception that wage increase adjusted inflation is a bad way to think about wealth. In this post, I will talk about another common mistake workers make. The mistake is related to lifestyle, with special emphasis on accommodation. Whether be it rented house or owned home, the same problem is observed. 

     Many workers tend to live in a middle-class neighborhood. There is nothing wrong with this idea if your wage can afford it. Some workers pay house rents which can represent about 40% of their takehome pay. This may not be obvious because house rent and condominium fees are paid in different days. One can only create wealth when he or she minimizes the expenses and maximizes accumulation and compounding mechanisms. 

     Many other workers take up high value mortgage in order to own their houses. Although having a home is good, one cannot put all his money in that. How can one live in a house with mortgage value of $1 million, but living on a monthly wage of about $20,000? What happens if the person buys a small house and accumulates $7,000/month for a period of 10 years in investments? At the end of this period, the person can buy the house of $1 million and pay cash. The person will be rich to the point he or she can even decide to stop working. 

     Wealth creation requires patience. In the success jargon, it is called delayed gratification. That is, to have patience and make sacrifice now so you can be wealthy in the future and buy whatever you want. Think about that!          

  

Walter Okpala: Mistakes for wealth creation 2

Walter Okpala: Mistakes for wealth creation 2: In my last post, I wrote about one of the most common mistakes people make about creating wealth for themselves. In this poat, we will look...

Mistakes for wealth creation 2

In my last post, I wrote about one of the most common mistakes people make about creating wealth for themselves. In this poat, we will look at another common mistake we make. The mistake is looking at the wage increase and inflation adjustment as a way of maintaining standard of living or wealth.

     From my experience of working with executives, I have come to realize one common area of addiction of all. I generally have argument with them about wealth creation. The common belief among them is whatever it takes to maintain their current standard of living with inflation adjustment is alright. Even when they make investments, they will be counting on the return that will maintain the current purchasing power of their money. I tried to show them that this way of thinking is wrong. As a result, some live in expensive houses of about $1 million dollars, but do not have any investment. 

     My argument is that one should accumulate as much capital as necessary to be giving him or her good and sustainable return. The support to my argument is that someone with $10 million cannot feel any type of inflation when compared with someone with $500,000. The person with $500,000 did not invest because he thinks the return is small and cannot keep up with his current standard of living. The point I am making is that inflation affects everybody, but not at the same rate. The wealthier one is, the less is the effect of inflation and vice versa. 

     In summary, fighting for wage increase through inflation adjustment is not a way to build wealth. Rather, wealth is built by having patience and accumulating a lot of money through investment. Think of that!           

Walter Okpala: The common mistakes for wealth creation 1

Walter Okpala: The common mistakes for wealth creation 1: In my previous posts, I have given some tips on how someone can build wealth through his or her income. These tips are necessary because mo...

The common mistakes for wealth creation 1

In my previous posts, I have given some tips on how someone can build wealth through his or her income. These tips are necessary because money is something that everybody wants to have, but few people really understand the principles behind having it. Almost everybody skips these principles. As I am writing this blog, I have made a lot of mistakes regarding money. Some of the mistakes we generally make are:

 - that only people from rich family can be rich

This idea is completely wrong. A recent research carried out in the USA in 2015 showed that 80% of the millionaires are self-made ones. In other words, they did not inherit anything from their parents. Some people use this as a reason to make themselves comfortable instead of struggling to break the barrier of poverty.  

 - that one cannot be rich by doing a 9 to 5 job

If a street vendor can be a millionaire, why shouldn't someone with a well-paying job be one? If one understands the power of his income (wage), he or she can be rich faster than someone without a college degree. The reason is that the source of wealth creation is right with the individual. Some well-paid executives or workers play lottery, hoping to become millionaires through this process. Think about an executive who makes $15,000 to $20,000 monthly. Investing in mutual funds, the executive will be a multi-millionaire in less than 5 years if he or she can be investing $5,000 monthly. That does not require a lot of sacrifice. If one can have $1 m after 30 years by investing only $100 monthly, $6 m by investing $500, imagine what happens by investing $5,000 monthly. If one can make this sacrifice, he or she can even stop working after 5 years. This way is more effective than waiting to reach retirement age in order to be receiving pension. 

In the next posts, I will write more mistakes we make.