What wealth creation strategy are you using?

►There are four main types of wealth creation strategies:
  1. Work for a boss
  2. Work for yourself/your business
  3. Build a business system that works for you
  4. Investing
Working for a boss is by far the most popular strategy. Each of these approaches have their own advantages and disadvantages. But ultimately, you want something that:
  • Generates income on an ongoing basis,
  • Generates income without you having to actively or physically work for it,
  • Works on your behalf, which means you have more time to pursue or enjoy other activities
The most effective wealth creation approach is based on the third option above, a business system that generates passive income.
 
 
 wealth creation strategies 
 
 
►Traditional investment approaches use financial products like pension funds and retirement annuities to build wealth.
 
However, the biggest problem with these products is that they follow a deferred income plan. This means that you will only receive an income at the end of your working days.
 
Also, consider the following facts:
  1. You will not have enough income to last you into your 70's even if you save 15% of your income for 40 years (Business Times, March 2006).
  2. The average South African retiring from a pension fund will receive a monthly income equal to only 28% of their final salary (Financial Mail, 2010). What will you receive?
  3. Your pension will start running short after five years after retiring. (Business Times, March 2006)
  4. Pension funds have taken the ‘invest and hope’ tack (Financial Mail, 2010).
►Traditional retirement products are ineffective wealth creation tools as they:
  1. Expose your money to risk. Current strategies use a 'high risk high return' approach. In other words, retirement funds place your investments at risk in the hope of achieving 'high' returns.   
  2. Remove control from your hands. By handing your income over to other people to invest on your behalf, you take all the risk and have no say over the return.
Financial success is based on creating wealth, not risk. And you certainly cannot achieve this by having no control over your money.
 
So is it possible to create financial freedom without relying on an 'invest and hope' tack?
 
Absolutely!
 
►True wealth creation is about:
  • Adopting a low risk high return strategy to build wealth.
  • Accumulating assets that generate passive income.
  • Sustaining your desired lifestyle regardless of whether you are able to work or not.  
►It's not about:
  1. Working for a boss
  2. Investing in managed funds
  3. Forex trading
  4. Running a business that requires your physical presence 24/7
  5. Pyramid schemes
  6. Playing the stock market
Your way to wealth is based on using business systems that work for you and generate multiple passive income streams.
 
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