Wealth creation means different things to different people

23/08/2019

Your biggest asset in wealth creation is you

What is wealth management?

Many people find concepts like private wealth management and wealth creation intimidating. That’s because they associate these terms with people who already have an abundance of money and are “living the life”.

You wouldn’t be wrong in defining wealth as having enough money to do and buy all the things you want in life. However, living a flashy lifestyle with lots of money in the bank is only one way of looking at it.

Wealth can mean different things to different people.

Our view is that the true definition of wealth is financial freedom. We also believe that how you perceive wealth has a big impact on how financially successful you will actually become.

By this we mean that if you are not actively thinking about saving money for the future, you probably are not doing so at present. However, if you put your mind to saving and use the right means to grow those savings, like a notice deposit account, for example, then building wealth will become a way of life.

4 tips to train your brain to think about wealth:

  1. Believe that wealth is within your reach.
  2. Commit to saving and investing for your future through products like a living annuity (for example, a flexible bank account designed to provide you with a regular income after you retire).
  3. Get the right advice about growing your money — you want the best interest rates and affordable bank fees.
  4. Make your investment/s for wealth creation a priority.

As you can now see, investments are not only related to the stock exchange and unit trusts. Making a deposit into a bank account regularly, or depositing a lump sum to grow over a period of time, is an investment into your own creation of wealth.

African Bank’s fixed deposit account is a good example. With only a R500 deposit, you get South Africa’s best interest rate of 10.75% per annum, which is equivalent to 13.33% per annum, calculated on expiry after 60 months.

Some other food for thought regarding saving and investing is that the basis of growing your money is good personal finance management.

How well are you managing your money?

These 5 steps will help you:

  1. Know exactly what your income and expenses are. Drawing up a budget and sticking to it is a very helpful financial tool in this respect.
  2. Scrutinise your current spending habits. Be honest with yourself and see where you can curb unnecessary spending.
  3. Avoid debt or pay off debt as quickly as possible. Prioritise your debt and try to pay off the biggest debt first.
  4. Save a portion of what you earn each month. At least 20% of your income should go into savings.
  5. Set financial goals (short-term or long-term, or both).

 

If you have not yet thought about what wealth management means to you, but are concerned about your financial future, the good news is that it is never too late to start building wealth for the day you stop working.

It is, of course, also never too early to start creating wealth for the future. What you do with your money today will impact your standard of living later in life.

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About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.