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Practical advice for wealth creation

Draw up a budget, which includes a savings plan and investment strategy, then stick to it. Review the situation when circumstances change and amend accordingly.

Wealth creation is an important goal for most, yet for many it seems unattainable and only something that people earning significant incomes will ever achieve.

It is, however, not impossible – whatever your income level.

In my years of experience as a financial advisor assisting a variety of clients, and through continuous research of markets and investment options, I’ve developed a set of practical steps for aspiring wealth creators:

  1. The sooner you start the better. No one but you is going to look after you in your older years! The sooner you start saving, no matter how small the amount, the better the life you will have in your later years. ‘I can’t afford it’, or ‘the amount I can afford won’t make a difference’ I’ve heard all too often. This is simply not true! Many people get to their mid-50s or later and only then realise they need to start saving for when they no longer earn a salary or fixed income. The shorter the time you have to save the less capital you will have at retirement, which will affect your lifestyle once you stop working if you can afford to stop.
  2. Don’t follow the masses. One key characteristic about wealthy people is they grow their assets by investing differently to the masses. They use a diversified approach and do not invest in only one asset class. Wealth creation requires an understanding of risk, when to take that risk and when to be cautious. Generating multiple income streams from businesses or within your existing business and making wise decisions on where to invest those income streams into a diverse investment portfolio – such as property and multiple financial instruments – will mitigate risk and is a solid foundation for wealth creation.
  3. Work with smart people. The wealthy appoint people they consider to be the smartest professionals in their area of expertise… whether it be accountants, attorneys or financial advisors who can think beyond investing, understand behavioural finance, have strong people- and communication skills, an excellent understanding of the history of financial markets and are constantly up to date with the latest trends.
  4. Be mindful of tax consequences. We cannot escape tax which impacts our income and investments. However, being aware of the consequences of any tax liabilities, especially capital gains tax and how losses can be carried forward and used to offset any future gains, as well as understanding how you can limit your tax liabilities using certain benefits offered by tax legislation, allows you to plan and structure your financial affairs more tax efficiently.
  5. Debt is not always a bad word. Taking advantage of the lower interest rate environment where the spread between the investment return and the cost of borrowing is attractive is how the wealthy take advantage to increase their assets. Responsible leveraging, using the bank’s money to attain appreciating assets such as property or a business acquisition in a low-interest rate environment where the yield is attractive, is good debt.
  6. Create a financial plan. Shockingly, many people do not have a clearly laid out financial plan, listing their assets and liabilities, future expected outlays and goals. Having an advisor who asks the right questions and monitors and reviews your portfolio and provides updates on a regular basis is a necessity to successfully achieving financial objectives.
  7. Structure the ownership of assets. This becomes particularly important for wealthy families. Is there a need for a trust? What are the benefits of a trust? Do I have a valid will? If I do, when last was it updated? Is it relevant? Have I ensured all my beneficiaries have been provided for adequately? What are the estate duty implications?
  8. Prepare your children for the future. Many wealthy clients are concerned about what their children will do with the wealth they will inherit. With the gift of inheritance comes a huge amount of responsibility. My suggestion is to encourage children to start saving and engaging with an advisor as early as possible, to ensure that they are being educated on all of the above to start creating their own wealth and to ensure that any legacy left to them is managed responsibly.


Key to getting started is to take a long, hard look at your financial situation. Draw up a budget, which includes a savings plan and an investment strategy, then stick to it. Review the situation when circumstances change – for instance death of a spouse or divorce – and amend accordingly.

To navigate a complex investment universe, make your investments as tax efficient as possible and understand the best structure for your assets. It is also highly advisable to consult a qualified, recognised and experienced professional financial advisor.

Want to see an example of what is possible and can be achieved? Read this.

Do you have any questions you would like answered by registered financial planners?



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