Financial Literacy - Think Wealth Creation

Thinking Wealth Creation is the most important shift in your financial literacy thinking that must be made if you are to achieve your goal of financial independence. And to make this shift in thinking you must understand what wealth really is.

So the question then is “What is Wealth?”

Adam Smith in The Wealth of Nations described wealth as "the annual produce of the land and labour of the society." And this "produce" at its simplest is that which satisfies human needs and wants of utility.

And in popular usage, wealth is described as an abundance of items of economic value, or the state of controlling or possessing such items, usually in the form of money, real estate and personal property.

Here wealth is categorized into three principal categories:

Personal Property, including homes or automobiles;
Monetary savings, such as the accumulation of past income; and
Capital wealth of income producing assets, including real estate, stocks, and bonds.

And a person is usually considered wealthy when they have accumulated substantial resources in either of these categories relative to others around them.

Making wealth an important part of our social and economic well being as it provides the financial safety net that protects you against unforeseen events that can adversely affect your standard of living such as job loss, death of the major bread winner, sickness or other emergency.

Simply put Wealth is the accumulation of resources that are easily accessible to you for use with little or no effort and expense.

And you can easily determine your wealth status by answering the question “How long can you go without a pay cheque?”

Thinking wealth creation then should be the foundation of your financial literacy and financial planing as you will only earn a fixed number of pay cheques during your working years. Therefore you should be focusing all of your money and efforts into turning those pay cheques into wealth.

So are you thinking wealth creation?

Are you focusing all of your money and efforts on creating wealth?

Unfortunately, most person are not thinking wealth creation and this is because they have grown accustom to earning a pay cheque and getting these pay cheques at regular interval has given a false sense of security that these cheques will continue indefinitely.

But you must realize that there will come a time when you will no longer be receiving a pay cheque and when the pay cheques stop you will have to depend on the resources that you have accumulated over time to sustain you - your wealth!

I invite you to take another step to improving your financial literacy by getting FREE "Your Financial Secrets for Everyday Living!"

Except from “Financial Literacy- Six New Ways of Thinking That will Change Your Financial Future” by Glenn S. Ferguson  