Can I become wealthy?

How do I become wealthy?Should I invest in the stock market?These are all questions that we might find ourselves asking at some point or another in our lives. Well, unfortunately, these questions are not easily answered with a yes or no, and there is no wrong or right answer to these questions. However, there are some things you should know before attempting to answer these questions, and they are ‘The Truths About Wealth’. Before you start investing, it’s best to be informed.Truth #1 – Wealth is accessible to all, but not all will access it!This is a fact, but if you have already been deterred by this harsh but true statement, then you have already started off on the wrong foot, or rather, no foot at all, because it is likely that you would not have even bothered to take that first step. In order to access wealth, you have to put yourself in a position to do so — by starting now, not later, whether it is spending less, saving more, or investing in stocks or other securities.Be a go-getter and make wealth accessible to you even if it means taking risks. Don’t be afraid to lose, because it is imperative to believe that you can always get it back, and even more. Being proactive also means a change in your mindset, your mentality, and the way you think. Be optimistic, and don’t limit yourself. If you never see yourself as having your dream house, then chances are you will never work for it or put yourself into the position of attaining it. Remember, small efforts lead to small results, so think wealthy, think big.Truth #2 – There is no universal formula to becoming wealthy!The path to wealth is nothing short of a maze. There are many ways of generating wealth, and what works for me may not work for you, nor do we all have the same opportunities to begin with. However, one recommendation by the experts that would appear to work for all is…diversification. Diversification represents the idea of “not putting all your eggs in one basket”. Although saving is a big part of accumulating wealth, it is not enough. One needs to have multiple streams of income or earnings.Your income should be active as well as passive. An active income would include your earnings from your job, and for most of us this is definitely not enough to make us wealthy. Passive income, on the other hand, follows the concept of making your money work for you. One good example of making your money work for you is investing it, whether it be in stocks and securities or real estate. So, think about earning your salary (active income) while getting rent from property or dividends from stocks (passive income).Truth #3 – Most wealth is accumulated over generations.Another truth is that most wealthy people or families are where they are today because of generational wealth, which is wealth inherited and passed down from generation to generation. This therefore gives credit to the statement that “the rich will always get richer”, because it is easier to make more money when you already have money. As a result, the wealth that we would probably like to amass in our lifetime would have to have started from your ancestors and won’t be entirely for our benefit.Wealth is about hard work and sacrifice, a sacrifice made now so your children and their children will have a better start. Even if you were not one of these wealthy “generational fortunates”, you still have the chance to allow your successors to become wealthy. This is not to say that those who have inherited wealth enjoy the spoils without hard work and sacrifice, which leads me to my next truth.Truth #4 – It is easier to become wealthy, but harder to maintain it!A teacher once told me that it is easier to get an A and harder to keep it. Anyone can get lucky and win the lotto, but chances are they will lose it even faster — ‘Easy come, easy go’. It takes foresight, a sound plan, and good management to maintain your wealth. I am not asking you to be a prophet — only to be aware and informed. Don’t be one of the ones who say, “If only I did this when I was younger, if only I knew better.” So be honest with yourself; if your forte does not involve good money management and planning, don’t be afraid to go to the professionals, they are not all profit-hungry. If you are interested in investing in stocks and securities, go someplace where not only are you appreciated, but where your investments appreciate.Truth #5 – Wealth is freedom, but more responsibility.Wealth can be good and bad. It offers you financial freedom, but you might find yourself with more desires and more expenses. The term “more money, more problems” comes to mind. However, I also believe in working hard and playing hard, so I encourage you to enjoy the fruits of your labour and not be a miser. Spend, but don’t be greedy; know when to hold and know when to fold. Don’t make spontaneous financial decisions that satisfy your need for instant gratification. Start making wise financial decisions that will benefit you for the rest of your life.Truth #6 – Wealth is achieved, not perceived!Don’t spend too much time looking at other people’s wealth. Quite often, the people who appear to be wealthy have a surplus of loans and negative credit card balances. Be guided by wealthy people, but don’t be deterred by them. Don’t let someone tell you that your plans are not worth it. After all, some people will always want to see you do well, but never better than them. True wealth is earned, and it is not always about working hard, but working smart. Let your money do the work for you. Be committed to your plans and investments, and don’t be haphazard.Truth #7 – Wealth is not only monetary.Finally, invest in your well-being, your health, your body, your mind, your family, your friends, and your passion. Remember, being wealthy doesn’t always mean having money — it involves being happy with what you have. 

Daniel Wong is the Internal Control Associate at Stocks & Securities Ltd.