buying guides for african women
author
Joanna M.
Business
09 / 2020

How Do You Build Wealth In Africa – Top 15 Ways

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Building wealth, especially in Africa, involves a number of strategic steps. It also demands a lot of discipline, patience, and hard work before the results come to light. Nevertheless, it’s a profitable way to prepare for the latter years. This article takes a look at some of the ways to build wealth, with a focal point on saving and investments.

Save The Right Way

You must have researched a number of ways to save, and by now, already have a savings account. Thankfully, this is the first step to building your wealth. Nonetheless, there are further tips you can implement to stay relentless. In order to save the right way, it’s important to automate your savings because more times than less, keeping up with saving routines can be hard, especially as life unfolds in unexpected way. Automate your savings helps you to worry less and invariably have more money saved up. Africa is currently flooding with numerous saving platforms which aids in easing out the basic saving hassles. They also offer numerous monetary benefits such as high interest rates to encourage many to save more.

While Saving, Invest

African economies are steadily working towards becoming top economies. With certain efforts by the governments to expand productivity and increase investments, these goals are slightly being achieved. Nonetheless, most economies still face certain unpremeditated crisis. A viable example is inflation, which could devalue all your savings, and risk ruining your efforts. Thus, one crucial key to building wealth is to invest, even while saving. You could decide to invest in a venture that gives an interest rate higher than or equal to the average inflation rate; or, you could select other investment options such as bonds and mutual funds. Thousands of online saving platforms in Africa provide these investment opportunities to help individuals save and invest profitably, while growing their wealth. Picking a particular percentage of your income to invest is one of the key ways to remain consistent.

Create More Sources of Income

While depending on savings and investments is highly essential, creating more reliable sources of income is a lucrative way to build your wealth even more. As humans, we’re filled with talents, interests and passions, which could be turned into intuitive business ventures to help us earn more money. A detailed market analysis is required to decipher how your passions could better the lives of people and eventually turn into a business. Taking out time to improve on your interests is one way to increase your professionalism and earn more money. Digitalization is moving at a fast pace, which means business opportunities are looming on the internet. Spreading your market base to the virtual world is also a reliable way to diversify your sources of income. 

Monitor and Increase Your Savings and Investments

Periodically, it’s important to monitor the progress of your savings and investment. This will help you stay focused on your goals. More so, it will help you decipher when it’s time to implement new tactics that could boost your progress. Checking on your investments within a 2-3 month window is appreciable to stay informed on possible gains or losses. Using the knowledge gotten from previous investments will allow you increase them in the most profitable manner. If you’ve gained multiple sources of income or perhaps a promotion at work, increasing your investments is a secret way to build your wealth. Saving more from your side business than your normal budget is another way to make your financial goals a reality. 

Reduces Expenses

The world is flooding with innumerable side attractions, which means it’s quite easy to get lost in expenses. In order to invest more productively without feeling a strain in your pockets, it’s advised to cut down on expenses. For any average person, these may not necessarily be exorbitant purchases, but may have little to value when put into consideration. Prudent ways to cut down on expenses include going for affordable substitutes, and purchasing only essential commodities and services. This helps you prioritize and make smarter choices. Creating budgets would also help you allocate and spend money more efficiently, pushing you to more wealth. Setting up periodic reduced-spending challenges aids in resisting the temptation to spend; while in general, adapting to a life of reduced expenses helps you adjust to better financial management.

Consulting a Financial Advisor

Though seeing a financial adviser may seem costly, in most cases, it is worthwhile. This is a crucial step in building your wealth and preparing for retirement. Without proper information on investments and financial matters, it is extremely easy to overturn years of hard labor with one wrong financial decision. This is why having a financial advisor is greatly important. With productive information on the steps to take at each point in time, your finances can be properly managed even in the face of unprecedented circumstances. Another advantage of having a financial advisor is that you get accurate information on the best investment opportunities, which would guarantee you more profits than losses. In addition, there is a sense of comfort delivered on all your financial matters, allowing you to focus productively on other areas in your life.

Stay Informed

If hiring a financial adviser isn’t in your budget, then another valuable way to consistently build your wealth is by staying informed on money matters. In order to accomplish this, you need to be have constant updates. Subscribing to a personal finance blog is an easy route, other than making personal researches perhaps you find it tedious. You can also opt for financial newspapers to expand your knowledge base. In general, surrounding yourself with everything related to money and financial matters keeps you one step ahead. Television programs or mobile applications are other effective alternatives to getting the information you need and finding the best investment opportunities at profitable points in time. Trying to stay informed may be challenging but it will save you from a financial crisis or detrimental monetary choices.  

Remember to Settle Your Debts

It’s one thing to save and invest, while it’s another to accumulate debts that could create a hole in your savings. Short-term debts can hinder the process of building wealth over time, which is why it’s advised to settle them as quickly as they arrive. Short-term debts such as credit card debts that have high interest rates when they accumulate should be handled with more alacrity. It is advised to cancel all reoccurring subscriptions for things you no longer need, to cut costs and perhaps avoid debt buildups. Not to mention, making a list of all your periodic debt will help you allocate your earnings efficiently even before it arrives. Creating a schedule or a reminder for payment planning is one tactic that helps you manage your finances better. More essentially, all these should be developed into a habit to secure your savings even in emergencies.

Create an Emergency Fund

Peradventure unexpected expenses occur or one debt is not sufficiently settled, an emergency fund comes in handy to ensure you don’t fall into a financial crisis. It serves as a suitable backup when the unexpected happens. Emergency funds should be saved alongside your regular savings, and should be done periodically, starting with a small amount to ensure you basic needs are not superimposed. Overtime, your emergency fund savings can be increased as your income increases. The amount to be saved as an emergency fund simply depends on your household expenses. It should equal you expenses at least 3 to 6 months. This would give you enough security during a crisis. It is important to calculate your household expenses before saving to accurately plan out a saving routine over a period of time. 

Invest in Properties

Investing in property has its advantages and disadvantages, but without a doubt, it’s a great investment opportunity for the long-run. More times than less, it’s one of the best investment opportunities because properties are always needed. In addition, it could be favorable to because the cost of property can increase. Types of property investments include listed property funds where stakes in real estate companies are purchased without having to manage the building physically; and primary property investments that allows you to physically buy a home with hopes of increase in costs in the long run. Other types of property investments include properties for renting and offshore buy-to-let investments. All these are profitable long-term investments for building wealth. If you’re just starting out, it is advised to buy just one at a time, secure and fully manage it, before proceeding to make another purchase.

Invest in Yourself

Amidst all the investment and saving routines, it’s important to invest in yourself. Taking extreme measures towards building a financial goal is not advised, especially if it cuts down on basic amenities you need to survive. Your health is another priority to put in utmost consideration, because a healthy life eliminates all unnecessary medical expenses in the long run. Apart from investing in basic amenities, you should also invest in skill and knowledge acquisition. Businesses tend to lose their value with changing times, which is why it’s essential to gain more knowledge, especially in diverse fields to secure multiple sources of income. This may demand having to spend a lot of money to take online courses, or partake in a coaching program; nonetheless, this is a substantial way to secure wealth in the long run.

Invest Your Windfalls

A windfall is a large unexpected influx of money that is often used on unprecedented financial expenses. Though this may be good, it is best to invest your windfalls. If you spend it all, you miss the opportunity to bring you financial goals a step closer to actualization. Most times, windfalls come far above our spending budgets, results in spending wastes in most cases. Hence, finding a profitable investment opportunity to increase the amount in the long run is a rather prudent option. Not to mention, developing a habit of investing all your sudden influx of money can multiply your earning and build your wealth faster. 

Consider Your Long-Term Expenses

Long-term expenses include housing or car loans. For most people, these make up almost half of their expenses. Reducing this to the barest minimum would help in building wealth faster. It is advised to reduce unnecessary household items as this will cut down most of your maintenance costs. The less items you have, the more affordable your home becomes. Getting a new car could also be detrimental to your finances, especially if you’re going to be paying interest on it. Purchasing a more affordable one without loans will save costs, cut expenses, and aid in wealth building. In cases where this isn’t possible, it’s best to go for affordable cars with cheaper loans. Cutting down long-term expenses like this will create space to invest profitably in other areas.

Surround Yourself With Supportive People

The company you keep determines the overall outcome of your wealth-building process. If you surround yourself with people that can discourage your dreams or drain your earnings, then your wealth-building plan remains idle. A vital step in securing wealth for your future is to properly assess the people around you. In addition, learn to prioritize on who your finances support at every phase. Marry the right spouse that understands your financial targets and would work with you to achieve it. Constantly surround yourself with supportive people and stay clear of people that will push to the wrong financial decisions. 

Stay Motivated

The last step to building wealth solely depends on you. As long as you stay motivated and you retain your focus on the objectives you have towards wealth building, your goals would become a reality. One key strategy to staying motivated, even in difficult times, is to find a mentor. People who have gone through difficult times and accomplished their dreams stand as encouragements. It is also important to remain optimistic despite your pace. Building your wealth and securing a future will take time, but understanding this will keep you persistent. Lastly, remember why you started and never stop pushing.

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