"It is health that is real wealth and not pieces of gold or silver."
~Mahatma Gandhi

 

Should I build wealth the traditional way when I have very little?

No. Building your automated systems to make you money, is best done by ‘keeping your eggs in many baskets. The fewer baskets, the greater the risk to your eggs.

 

As I mentioned in my ‘Income Systems’ post, it is wise to spread your risk as you grow in wealth. Stability in wealth (as I learned the hard way) is sometimes the reverse of what you would expect.

 

What if I’m trying to build wealth but starting with nothing? Then you will have to build your ‘breakers’ first. There is a financial priority timeline which we look at in another post. 

 

As part of my ‘financial flood Preparation plan’, I recommend introducing traditional investment at stage three - ‘Build Your Seawall’ - this is after you have cleared your high-interest debt.

 

  • Build Your Sea Wall

    • Reduce hours on your PSI (if employed), and transfer into a business vehicle of your choosing (unless you are in a career you are happy with!).

    • Introduce multiple passive incomes

    • Introduce multiple traditional investments

    • Clear non-high-interest debt down to 50% of original

    • Add 2 months to your emergency fund (total 6 months)

 

Whilst many people may encourage you to focus on traditional type investments when you are starting even from zero, I think it makes sense to steady the ship first.

 

In Portland Oregon, there is a Church campus built by the late great man Pastor Iverson. Back in the 70s, he built these large domes as part of the Church infrastructure. 

 

The building process was quite new at the time. The building contractor inflated these large balloons with air and covered them in concrete. I think they look great! See below.

portland bible college domes https://www.monolithic.org/featured/featured-churches/city-bible-church

WHAT POINT ARE YOU MAKING?

Sometimes you need to add sturdy materials later. Build some stability to get a grip on things then add the concrete later. 

 

The foundation of you, metaphorically speaking, is not your money - it’s what's going on in your head and your heart. Your Character and spiritual life - that's for another page.

 

You can, of course, introduce traditional-style investments into your plan at any time. You will do what you feel to do anyway!

Wealth Solar System Model.png

What's the attraction of traditional investments?

 

Watching the original Mary Poppins, the advice of the Banker (Dick Van Dyke) to the children regarding investing was:

If you invest your tuppence, Wisely in the bank, Safe and sound ,Soon that tuppence, Safely invested in the bank, Will compound, And you'll achieve that sense of conquest, As your affluence expands…

🤔ummm - no.

 

Today banks are not paying anywhere near the level of returns that they did before 2008. There are several investments that you cannot even participate in unless you have over 250,000 to invest. It's a closed wealth door to the majority of the population on multiple fronts.

 

People love traditional type investments like bonds, index-linked funds, pensions, and precious metals because they provide a safe zone to store your money. 

 

Yes, I said ‘store’! Whilst many traditional type investments provide some returns, they are seen ultimately as a place to maintain wealth, as opposed to growing or reducing it.

 

These types of investments earn less but provide greater financial safety. That's not necessarily a bad thing. It's a great plan when it's a part of a bigger wealth vision.

 

Why do people choose safe havens over their riskier counterparts?

 

  • They are risk-averse

  • Self-preservation

  • Higher level of protection from outside forces (war, politics, or weather)

  • Bad experiences previously

  • Lower short-term goals

  • Like building steady and strong

  • Protect family short term

  • Provide for the family in 20-40 years

  • Leave a legacy 

 

List of traditional ways to make money today

There are many ways you can benefit from traditional investments. A basic list is outlined below:

 

  • Precious metals

  • Pensions

  • Bonds

  • Stocks and shares

  • Residential & Commercial Property

  • VC Funding

  • Lend your money through trusted online companies

  • Watches/Sneakers/coins - collectibles

  • Paraphernalia

 

Wikipedia's list is shorter but confirms some of the ones I included.

 

Will traditional wealth routes would suit me?

You will have an idea of which investment types you are attracted to. Your job is to find those you are willing to try at levels you ‘can afford to lose at. 

 

Three steps towards knowing what type of business you would suit?

1. Take the personality test here

  • It helps to know your nature before you choose. If you are naturally risky, try and find the balance to mitigate your desire to push things to the max right now!

  • Find registered reputable people and businesses that can advise you. Always get three quotes and never decide solely on the salesman's charm - base it on his honesty.

 

2. Calculate your time & energy limitations

  • Are you a parent?

  • Are you married?

  • Do you commute to your main job (until you're earning enough to quit)?

  • Do you spend time caring for a family member?

 

3. Note your money limitations

  • Do you have savings?

  • Do you have poor credit?

  • Do you have equity in your home?

  • Can you raise money by selling your excess stuff?

 

Money limitations are there for everyone, regardless of who you are. There will always be limits on what kind of investments you can make when starting.

 

If money is no issue then great, find a sweet spot between the investment types, your vision, and your lifestyle.

 

However, if you are starting with little to nothing, then consider the following steps as a 1-2 year wealth strategy:

  • Build a war chest - even if it's £/$500!  Don’t spend it. I believe it was Peter J. Daniels who once said, “if you cannot save money, the seeds of greatness are not in you”.

  • Use that war chest to start a small business. Could be a quality blog or vlog, a cleaning business, a handyman business, or something you can do in addition to your primary income source that will not distract you, drain your energy, and bring a good return.

  • Build your war chest further to 10-15,000.

  • Use that war chest to spread your investments:

    • 30% toward passive incomes

    • 20% toward traditional incomes

    • 20% Towards building your business bigger? OR instead, build a second passive business.

    • 20% toward savings

    • 10% towards giving/Tithing - IN MY EXPERIENCE, IT WORKS!

 

What's a good amount to start investing with, and what could I earn?

Key questions to ask before you put your money in:

  • What can I afford to lose?

  • Do I have a six-month emergency fund already in place?

  • Is my spouse or partner on board with this?

  • Can I convince at least two other people I trust this is a good idea?

 

We all have to start somewhere. Using 500 to get started is a good level to start at for your first investment. That means ideally you would have 3-6 months of income saved in your emergency fund.

 

If you feel you can afford to take a risk then do so at your pace and no one else's.

 

We do discuss passive income opportunities on this site, and typically investments will pay out around 5-10% per month. Compared to traditional investments, which have their benefits, pay approximately that per year. 

 

I hope you enjoyed this article. Stay in touch by subscribing to hear about upcoming screened opportunities that I have decided to participate in. 

Legal Bit

Any financial strategy discussed is at risk of the potential loss. No past performance of any opportunity should be considered an indication of confirmed future benefit. Any financial strategy discussed should not be considered financial advice and is subject to your assessment/s before deciding to proceed. I am not a registered accountant or tax/financial advisor. Please also note that I may benefit from my advice through affiliate systems, however, I only share what I believe to be the best companies, and the commission made is second to that fact.

Jim Johnston

Jim Johnston is an award winning entrepreneur. With a business banking background in London originally, he went on to create a national B2B start up in the UK, for on-demand property services. A blogger, copywriter and all round creative, his vision is simple - to see people experience wealth in every key area of there lives. True wealth!

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