Rich vs Prosperous

Being rich is having lots of money; but being prosperous is having lots of choices. Which do you prefer and do you have the 5 essentials to get there?

Adeline Tan, Executive Wealth Mentor, SG Alliance Pte Ltd

People view money in different ways – for some it’s a means of survival, for others, a mere play thing. When it comes to saving and investing, most younger people are unaware of how to best use their money to make them prosperous over a longer period of time, instead of just richer.

“Work hard today, so you can breathe easy tomorrow.” Sounds easy? Perhaps it is! One of the biggest mistakes most millennials make these days, is not having a financial plan.

Being prosperous involves making the right choices with your riches, irrespective of how much you earn. Most experts and authors are of the view that people can get rich quick, but to remain prosperous over time, it takes good money management; here’s are five essential virtues for a good start:

Learn the Math

Financial literacy is about making good financial decisions on a regular basis. A basic understanding of finance is adequate to help you grasp concepts such as budgeting, and making smart expenditure and savings choices. To improve your financial knowledge, read and consume good content. Follow people or blogs that can help you set financial goals, or provide an understanding of how the financial markets work. After all, knowledge is wealth.

Keep tabs on your worth

Most people associate the term ‘net worth’ with ‘rich’ people like celebrities, but the fact is, we’ve all got a net worth. To find out yours, calculate how your assets outweigh your liabilities or debts. Keep in mind that your income doesn’t form part of your net worth, but your savings/checking account does.

Visualise your roadmap

Creating financial goals helps you in the long run to becoming prosperous. Think of these goals or plans as the blueprint to managing your finances in the present, and having knowledge about what it could potentially convert into, in the future. Find out more about the various financial products out there so you know what suits your wealth portfolio best.

Build (and manage) your resources

Building resources over time involves working hard and finding ways of earning a steady flow of income – and ensuring your expenses aren’t unnecessary; it means investing in good debt, a.k.a. debts that generate income and have the potential to turn into assets in the long run.

Get a money mentor

Financial plans involve financial knowledge. Even then, many of us find it difficult to understand how to hook our financial conditions to the start of our personal goals. If your long-term financial strategy involves winging it, then you probably need structured insight. Getting yourself a money mentor — someone who can give you professional advice on your personal wealth plans —can save you lots of time and painful wrong turns. The good ones don’t just have the knowledge, they have a wisdom to help you navigate your financial roadmap to make sure they are in sync with your life goals.

What’s your plan?

A good goal is to become self-sufficient over time so you can live life the way you want to without having to keep working at it. It’s really never too early to start.

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