FOR some employees and investors wealth creation is not an attainable goal, only a notion.

However, wealth creation has more to do with time than money. We all are given time, but when it comes to investing for many people it’s about how much they can earn now, with little emphasis placed on how much earnings can be generated in the future if we take the necessary action today and make sacrifices that will yield greater results later. Delayed gratification is important for wealth creation. Though renowned investor Warren Buffet is one of the wealthiest men in the world today, he places more value on time than money. At age 94 he is still a savvy investor. He said, “I can buy anything I want, but I can’t buy time.”

One of my clients recently lost her job due to a redundancy and she has now embarked on an entrepreneurial journey. A lifetime investor, she agrees that time and compound interest allowed her to amass significant wealth assets over several decades. She wasn’t born into a wealthy family — time has been her greatest asset. Throughout her working years she saved and invested from every pay cheque, planning for her retirement by contributing to a retirement scheme. The pension funds from the employer’s superannuation were transferred to an individual retirement scheme. Spending her retirement savings was not an option that she contemplated. She is focused on building a substantial retirement fund.

Last week, this client shared her plans for the future and the historic investment journey. She described “three assets” that can create wealth, and she invested in these from her salary. The assets are real estate, stocks, and owning a business. The real estate and stocks have compounded in value tremendously. Let’s examine her investment journey to date.

The mortgage on the first house was re-financed to benefit from the falling interest rates that existed at the time. As a result, she avoided millions of dollars in interest payments. Her 30-year mortgage was paid off in 17 years. How was that possible? Even though her monthly mortgage payments were reduced because of the refinancing, instead of paying the new monthly payments she opted to make the original monthly contributions, therefore she paid down more funds on the principal each month. This property now provides rental income. Her current residence was purchased for $5.1 million and is now valued at $30 million. She liquidated her equity/stock portfolio twice to purchase real estate, including a farm that grows long-term crops such as coconuts and ackee.

Long-term investing in the stock market allowed her to accumulate her real estate assets. While investing in stocks for the long term, she reinvested her dividends. She understood the benefits that this investment strategy offers. Reinvested dividends increase the returns on investments and build wealth over time. Dividends are payments made by a company from their profits to shareholders as an award for their investment in the stock. The investor who is patient and persistent is rewarded with a substantial source of income that the reinvested dividends provide in the long term. There are retirees whose dividend cheques supplement their pension funds or provide retirement income.

The aforementioned client has demonstrated the discipline required to invest for the long term and is reaping success. She is not yet a pre-retiree and therefore has more time to build her investment portfolios to create wealth or to retire wealthy. As a shrewd investor she is experienced in navigating the stock market and the economic cycles. Since the pandemic the local stock market has been in decline, but this assertive investor has seized the opportunity to invest heavily in the stock market as she invests for the long haul. She believes that holding stock portfolios for more than 10 years is a wise investment strategy, regardless of occasional or short-term losses. Exponential growth takes place in the long term. The longer funds are invested in the stock market undisturbed, the greater the potential for wealth creation. Investing in great companies is necessary but so, too, is time.

This client is ardently building her consultancy business as well. Streams of income are important for wealth creation. I offered nuggets from two wealthy investors and entrepreneurs to this client: Warren Buffet’s advice to entrepreneurs is, “not to satisfy your customer, but delight your customer”. Founder and executive chairman of Amazon Jeff Bezos said, “When given the choice of obsessing over competitors or obsessing over customers, we always obsess over customers.” Their customer-centric philosophy is responsible for their long-term business success.

Grace G McLean is a financial advisor and retirement specialist at BPM Financial Limited. Contact her at gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at: livingaboveself@gmail.com