PUTTING IT ALL TOGETHER…ON THE PATH TO THE NEXT PHASE

CONVERSATION WITH MY BILLIONAIRE FRIEND
SESSION 28

My meeting with my Billionaire Friend was a short one; it was essentially a review session and we went through the entire project and looked at the feedback from the readers. My friend confirmed we needed to move to the next phase but that would require a recap of what we have done so far to put people in the picture again. So here is the first set of recaps. Enjoy.

BUILDING WEALTH STARTS FROM PLANNING AND UNBROKEN DEVOTION TO EXECUTION

“Without commitment, there are only promises and hope, no plans” – Peter F. Drucker.

Building wealth is not a miracle. It takes intentional planning and taking active steps. Being intentional with one’s life is rare. Many people are not in control of their lives, they are easily influenced by extrinsic factors, distracting their focus.

In building wealth, there is a need for a “Wealth Plan”- the same way you don’t enter a business without having a clear-cut plan, analysis and financial projections, you don’t build wealth without a plan.

WHAT IS A WEALTH PLAN?

“A wealth plan is a detailed form of looking at the micro and macro environment and devising ways to achieve wealth creation. In other words, it involves the continuous processes of designing and reviewing the economic and political environment, available investment vehicles and instruments, prevailing financial policies and indices, available opportunities and other qualitative and quantitative inputs for building wealth. This is what wealth planning is all about”.

HOW CAN YOU GO ABOUT WEALTH PLANNING?

You can plan wealth by scanning, exploring and understanding the wealth-creating synergies around you. In other words, you need to broaden your knowledge base to achieve your goal of building wealth. This involves the non-exhaustive gathering of knowledge through classroom exposures or self-education by reading relevant books and articles and/or mentoring experienced investment/wealth building experts”.

CONTENT OF A WEALTH PLAN

The content of a Wealth Plan has to do with determining what your best wealth-building investments would be, given your skills, passion, knowledge base, the extent of the reliability and predictability of your political/economic environment and the relative performance of the various available investment vehicles in your environment”.

WHAT HAPPENS IF YOU DON’T HAVE A PLAN?

You should not blame others if you live in abject penury when you live without a plan. Every youth should have a plan for his/her future. You can not afford to live by the beggarly hands; the world does not listen to people on their knees. You must be completely devoted to that plan. Your plan must be absolute, only changing for the better, at enhancing and safeguarding your responses to the dynamics of the macroeconomics of your environment. The prioritising of buying Aso-Ebi should be out of it, the frivolous expense of unending partying should be out of it, and the issue of buying unnecessary expensive fashion items should also be out of it. The truth is that building wealth generally entails the continuous saving of scarce resources, which must be devoid of consumptive and wasteful living. It is a journey of absolute focus”.

HOW DID YOU TAKE CARE OF DISTRACTIONS AND RESOLUTIONS?

Building wealth requires avoiding distractions and complete devotion to executing wealth-building plans. Here are a few tips to help you get started:
● Don’t allow yourself to be influenced to buy what you don’t need
● You must avoid consumptive expenditures.
● Find a financial mentor.
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2. YOU DO NOT NECESSARILY HAVE TO OWN YOUR OWN BUSINESS TO BUILD WEALTH

“Wealth from get-rich-quick schemes easily disappears and destroys; however, wealth from hard work grows over time.”

Imagine two people; Mr A and Mr B earn 10 million and 5 million Naira, respectively. In 10 years, who do you think would be more wealthy? If your mind chose Mr A at first glance, you have work to do on your decision-making. Many factors could have influenced who will be more wealthy than the other. In this case, we’ll examine two significant factors; spending habits and investments.

Building wealth from earned incomes in paid employment is a long-term process. It is not a process of acquiring wealth within a short time; it is a gradual process of continuous devotion to converting savings into wealth by using the adage of “little drops of water makes a mighty ocean”- the highlight here is SAVINGS.

The question is, how do you save? Simply put, living below your ‘means.’— living below one’s income, ensuring that one’s total living cost is managed continuously to be much less than one’s earned income, leads to a wealthy life. As an employee, make sure you are prudent with your spending. Live on a budget. Your goal is to become wealthy and not look wealthy. If you would dare tame your spending habits, you are setting yourself up for a prosperous life.

Another factor to consider in our case study is investments. This is crucial in building wealth as an employee. You can accumulate wealth over time by initially investing in the previously mentioned financial instruments, then gradually and systematically investing in real estate, business ventures, and angel investments. The worth of your wealth can be significantly increased by doing this after first accumulating some wealth through investments in stock instruments, treasury bills, sovereign and corporate bonds, etc.

While saving, you must equip yourself with the proper investment knowledge and information. Talk to professional financial advisers, don’t rush the process. You don’t want to blow up your entire savings on Ponzi schemes or a bad investment. So, save. Live below your means. And while you save, learn about investment – this would help you grow your savings gradually.

Now, who do you think would become wealthier between Mr A and Mr B?

3. TO BUILD SUSTAINABLE PERSONAL WEALTH, YOU HAVE TO CULTIVATE THE HABIT OF CONTINUOUSLY LEARNING

“It is important to view knowledge as a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves or there is nothing for them to hang on to.” – Elon Musk

Learning should be a lifelong endeavour for anyone determined to build wealth. Building wealth requires knowledge-driven motivation, just like any other human endeavour. Building wealth means developing the habit of acquiring new knowledge at every level and studying all relevant subjects to reach one’s wealth objective.

For building wealth, learning includes reading, asking the right questions, and staying up to date with the latest information in your field. You must consistently practice these things, it must be continuous and endless. It must excite you. You must love it. Your commitment to learning will transform your financial life. The goal is to ensure you are familiar with finance, economics, and accounting fundamentals. Learning to read and comprehend financial, economic, and investment articles can be more useful to you than learning to become an accountant or economist.

Sadly, there is a craze for materialism and knowledge in this age. You don’t want to be like those who have been caught in the unreasonable glamour of consumptive lifestyle’. Expanding your mind is crucial if you ever want to become wealthy. The truth is an investment in material things does not prepare you for the economic and financial vagaries of the unforeseeable future, it does not generate capital gains, and incomes and are consumptively depleted.

Here are four must-read books for anyone who intends to create wealth:

● “Richest Man in Babylon” by George Samuel Clason
● “Rich Dad, Poor Dad” by Robert Kiyosaki
● “Creating wealth” by Robert G. Allen
● “The intelligent investor”, by Benjamin Graham

4. PATHWAY TO PERSONAL WEALTH: DISCOVER, EXPLOIT AND CREATE SUCCESSFUL BRANDS OUT OF GAPS IN HUMAN NEEDS

The greatest challenge you will ever face is that of expanding your mind. It is like crossing the great frontier. You must be willing to be a pioneer, enter uncharted territory, face the unknown, and conquer your doubts and fears – John Maxwell

A straightforward way of creating wealth is by discovering existing gaps within unsatisfied human needs, exploiting the opportunity around these gaps and building successful brands in the form of products and services. Simply put, solving people’s problems is the best way to create wealth.

In Rushel Conwell’s classic, THE ACRES OF DIAMONDS, the author highlighted that diamonds are all around us waiting to be mined. The problem is, how do we recognise these diamonds?

● You must be willing to read and research
● Be observant
● Look for the problems people are complaining about
● Talk to mentors.

People like Bill Gates, Elon Musk, Warren Buffett, and Aliko Dangote recognised a need, a gap, and they filled that gap and became billionaires. Let’s examine Aliko Dangote:

Aliko Dangote saw the huge unsatisfied opportunity gap in the local production of cement in Nigeria and went into creating a successful brand of his locally producing cement, eliminating cement importation by Nigeria and expanding his brand into some 13 other African countries. His brand is also exploiting the unsatisfied opportunity gaps in food, sugar, tomato paste and, very soon, refined petroleum. Dangote has thus built his wealth of about $12 billion from exploiting and satisfying the unsatisfied needs of Nigerians and other African cement with a successful brand.

We discover the opportunity gaps in human needs by scanning our environments through conducting market research. These opportunities hang there around us, waiting to be discovered and exploited by those seeking them. Knowledge is required for such discovery and exploitation of the unsatisfied need opportunities. A typical example is Warren Buffett. At only the age of seven, out of family financial frustrations and challenges, he borrowed a book for reading. The book was titled: 1000 ways to make $1000. Reading that book at that age; fired up the determination, the hidden talent, the commitment and zeal that has created the multi-billion dollars wealth of about $60 billion for Warren Buffett, who at some ninety years of age is still investing in trend-defining investments and building wealth out of it.

Conclusively, solve a problem. And if the problem is significant enough, you are on your way to becoming a billionaire.

5. THE ESSENCE OF WEALTH IS MORE IMPORTANT THAN WEALTH ITSELF (PART 1)

Everything in nature has a purpose, and that purpose is methodically fulfilled. Have you, for instance, observed the total interdependence of everything in nature? The earth grows the plants. The plants feed the animal. The animal feeds the man. The man dies and returns to the earth to fertilise it. Ask yourself, are you fulfilling your life’s purpose in the larger scheme of things? Every day and in every way, nature beckons you to share, love and live in simple harmony with it – Agbalagbi

The big question here is, “What is the Essence of Wealth”? The answer is: how much your wealth impact the lives of others is the Essence of wealth.

Read the biographies of great people like Bill Gates, Jeff Bezos, Warren Buffett, John D Rockefeller, Oprah Winfrey, and back home, Aliko Dangote, Femi Otedola, Jim Ovia, or any other person who built wealth over time, you would see this principle in all of them. Most of them have impacted the lives of others through their wealth.

How do you think seeds become trees? Well, if you asked a farmer he would probably have a good answer for you. However, logically we can say TIME plays a major role in this transformation. It’s the same in all strata of life.

Time happens to all of us, regardless of age, class, or status, we all obey the tick-tock. What distinguishes us from one another is what we do with the time that we all have. And if our time on this wealth can impact the lives of others, that’s a wonderful way to live.

The truth is, a little show of kindness from you has the power to transform the life of another person. You can only experience the essence of wealth when a piece of all you have serves humanity.

I can’t wait to catch up with you next week