Introduction

Imagine you get your first job and learn that wealth has nothing to do with having money, but rather what you do with it. This is according to Matthew Blume’s article published in the Harvard Business Review. He calls the belief of “putting money away as the most direct path to building wealth” a myth. After conducting some research, it’s clear that many financial institutions and academics in the field of finance are debunking this conception. So, the real question becomes: how does one build wealth? According to Matthew, while saving does not lead to wealth, it does provide for the capital. 

Defining Investing and its Importance

“Investing” or “to invest” refers to the act of allocating money or capital into assets, or projects with the expectation of generating a return or profit over time. Basically, making your money make more money. According to the South African Savings Institute report, over 70% of South African youth are spending their disposable income on non-essential like entertainment, fashion and dining out. Additionally, the National Treasury of South Africa revealed that only 20% of South African youth are actively investing their money. While there are implications, it’s important to recognise that this misconception stems not only from ignorance but also from a lack of financial literacy. According to the Youth Generational Wealth survey conducted by 1Life Insurance, over 50% of young people do not know how to build a stable financial future.

Investment Tips from Discovery

The Discovery Insurance Group published on their website, investment tips for beginners, which gives advice to the newly employed people or people who just started earning an income. Firstly, to become more financially secure, it is important to start by improving your financial literacy. Understanding finances empowers our decision making with regards to how best we use our money and how to make it work for us. Secondly, understanding key concepts like budgeting, saving, and investing will empower you to make informed decisions about your money. Next, consider finding a financial advisor who aligns with your needs and goals, as their expertise can guide you in the right direction. Seek guidance all throughout the journey to better propel your odds to success.

Building Wealth and Financial Freedom

Each generation, throughout history, has pioneered transformation that has led to our current age, either socially, culturally, globally, politically or economically. This is our opportunity to extend our step economically, ensuring that for generations wealth never becomes a foreign concept. Begin saving now for the day you wish to retire, as starting early can make a significant difference in your long-term financial well-being. Some of the privileges of permanently working in South Africa are retirement schemes administered by employment companies. It is important to keep checking your pension, and if it will–at the point of retirement–cover your livelihood.

Conclusion

Finally, remember that financial health is holistic—look after yourself both financially and personally, ensuring balance and well-being in all areas of life.

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