‘’To me being rich means being able to do what you want, when you want, without thinking about whether or not you can afford it. It’s essentially being free to live the life you want on your terms. While always knowing that you will always have enough money to support that lifestyle”- Andrew Daniels
The terms "rich" and "wealthy" are often used interchangeably, but in fact they are two different concepts. Wealth relates to how much money you have in the bank, and the security of your assets. To be rich, and stay rich, is more of an attitude, a state of mind that doesn't necessarily relate to your assets, but your quality of life. However, if you're looking to turn a big paycheck or other assets (stocks, real estate, an inheritance, etc.) into lasting wealth, or "stay rich," you'll need to learn to manage your money, making careful choices to ensure your assets won't disappear when the going gets tough. Of course, you can't take your money with you when you die, but you can follow certain steps to stay rich so that it lasts through your life.
Organize your finances
Diversify your finances in all areas of your life. Diversification is a key to sustaining the wealth you have. Ensure that your money is well diversified across a broad spectrum of investment classes including stocks, government bonds, mutual funds, real estate and cash.
Different areas of the market respond differently to the same event, for instance if you invest in bond and stock and stock is hit by market swing, a positive movement in the bond will serve as a shock absorber for the loss made from stocks.
Keep in mind that your risk objective may be different than when you were building wealth, you may now find capital preservation (keeping what you have) becoming more important than the risk that comes along with the more aggressive risky investments.
We believe the higher the risk with the investment the higher the potential return, always keep in mind your risk tolerance.
For example all the money you have is N5,000,000.00 can you afford to invest the whole N5,000,000.00 in a single investment expecting a profit or return of N2,500,000.00 we live in a period of unstable economy and anything can happen can you afford to loose the whole N5,000,000.00 or alternatively invest N2,000,000.00 in Project A and N1,800,000.00 in Project B and have N1,200,000.00 as fixed deposit which can be rolled over on a monthly basis.
1. Keep liquidity in mind it refers to how quickly and easily an asset or security can be turned to another asset. Cash is extremely liquid while real estate is not, it is not easy to sell your real estate between 24 hours and convert to cash or other assets.
2. Invest in new opportunities. You should not stop trying to build wealth just because you are rich or old. Aliko Dangote is still making investment on a daily basis despite being the richest man in Africa, from Dangote flour, Cement, sugar, juice, salt, now the new Dan cubes seasoning.
Now that you are rich make money work for you instead of you working for money.
Find business opportunities you can invest in to buil on the wealth you have or you can become an angel investor and have opportunity to invest in start ups. You can become part of the next Jumia, Konga or Uber.
You can also invest in particular companies you believe in and support them in a more direct way.
Companies you believe in, there are some people whose religion forbids alcohol and cigars so they can’t invest in Breweries or Tobacco companies.
You can also invest in an industry where you have passion in.
The Proprietress of African Community School in Abuja one of the best school in Abuja was a children Sunday school teacher in her church, her love for children and passion for always having kids around made her invest in school business.
3. Make money last, live on your income, not your liquidation of assets or keep your spending within a considered safe zone.
Avoid liquidating your assets just to buy luxury items otherwise you’ll be a consumer who loses money and not an investor who earns money. Spending money on things that do not retain value or have sentimental value is not a good way to make your money last.
4. Avoid unnecessary spending: A lot of people like showing off, and purchase variety of luxury goods to prove something to others.
I have a family friend who worked as a General Manager in one of the prestigious banks we have in Nigeria as at year 2002 they were paying him N700,000.00 monthly and he had access to loan, he had six luxury cars apart from his official car, buys new car for his wife who is a housewife on every birthday occasion with the latest phone, spends more than N500,000.00 for a ten year old girl birthday as at then, considering the time value of money, worth N1,600,000.00 few years down the line the man was sacked sold all his cars, back to penury because at age 52 years which bank will employ him?
5. Set up a trust: If you’d like to preserve your wealth for future generations, consider establishing a financial trust that will prevent spendthrift descendants from squandering away the money you’d like to pass on to them.