So many want overnight success. They wish they could get rich quickly. However, God’s way is to build wealth slowly.
Easy, steadily, little by little, over time.
In 1 Timothy 6:10, God’s word tells us, “For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows.”
In other words, when we get so fixated on money and focus too much on building wealth, it can lead us astray, down a pathway of destruction, away from God, and into trouble.
This can be illustrated in Proverbs 13:11. I want to look at this scripture by reviewing two different translations …
“Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time.” (Proverbs 13:11 NLT)
“Dishonest money dwindles away, but whoever gathers money little by little makes it grow.” (Proverbs 13:11 NIV)
Wealth from get-rich-quick schemes quickly vanishes, but when we grow money, little by little over the long term, we can grow a wealth portfolio.
In other words, God’s way of building wealth is to work hard and invest a portion of your income regularly. Over time, you will then accumulate wealth, little by little, and you will become rich.
I read a great quote from Paul Samuelson, that backs up this principle.
He said, “Investing should be more like watching paint dry or watching grass grow.” Paul Samuelson went on and said, “If you want excitement, go to the casino.”
In other words, investing should be boring. Don’t gamble to build wealth.
God’s way of building up your wealth portfolio is to do it gradually over the long term.
Slowly and steadily, you can progressively build up your wealth portfolio over time.
So let us consider a strategy to build up your wealth portfolio that aligns with God’s word…
1. You Need a Long-Term Plan!
It takes time to build your growth investments.
Growth investments can be volatile over the short term but generally produce real growth over the longer term.
To give you an example, a balanced mutual fund or unit trust fund usually returns in excess over 10% p.a. over the longer term. Year-on-year performance can be erratic and volatile, but over time these funds usually generate real returns.
The effect of compound interest on your investments can be huge. Compounding occurs when you invest money and allow it to continuously reinvest itself.
Compounding is the effect of earning interest not only on the money you originally invested but also interest on the interest that your investment has already earned. Compound interest therefore gives you the ability to multiply your money over time.
2. Start Investing Yesterday…
The sooner you start investing, the more time you give your capital to compound.
Your investment growth is not only determined by how much you invest but also by how long you invest.
The secret to generating explosive growth is giving your money time to compound. This can lead to growth beyond your wildest imagination over the long term. So, don’t put off your investing. The earlier you start, the better for you.
3. Don’t Complicate Your Investment Strategy.
It is easy to set up an investment. You can make use of a simple flexible investment solution, a tax-free savings plan, or a retirement annuity.
Furthermore, investing doesn’t need to be a gamble. You can select a well-diversified mix of funds that have a proven track record and are managed by reputable investment houses.
You can invest in a simple selection of mutual unit trust funds or exchange-traded funds.
I would suggest that you get some advice on what vehicle best suits you, as well as what funds you should consider. Take the guesswork out of your investing by speaking to a Financial Advisor who can help you set up the right investment structure, with the right fund allocation to meet your unique objectives. You can keep things simple.
“Where there is no guidance the people fall, but in abundance of counsellors there is victory.” (Proverbs 11:14)
So, get advice and set up a simple strategy that can grow over time.
4. Automate Your Investments -Make it Easy!
You can set up a simple debit order to come off your account each month. This will help you build a good financial habit of sticking to your investment strategy over time.
You can even include a set annual increase on your monthly investment to ensure that your contribution keeps up with inflation.
“The wise man saves for the future, but fools spend whatever they get.” (Proverbs 21:20)
5. Don’t Keep All Your Eggs in One Basket.
Even when investing in one investment vehicle, you can diversify your portfolio by spreading your money across different funds.
You can make use of a combination of growth funds, that can be spread across various asset managers, both locally and offshore.
“Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:1-2)
Diversification helps to reduce your risk and gives you a smoothing effect within your wealth portfolio.
6. Slowly, Steady, Boring…
There is a lot of noise in the investment world today. I would suggest that you ignore speculative and sensational market news no matter how scary or exciting it appears.
Also, stay away from the latest fads and do not get drawn into the fear and euphoria when markets shoot up or crash. Just stay patient and stick to your long-term plan.
“Whoever gathers money little by little makes it grow.” (Proverbs 13:11b NIV)
Just keep your investment ticking on and continue to invest a portion of your income each month. Slow and steady, keep on going. Your investment strategy should be boring. Over the long term, it will generate exponential returns.
7. Review Your Portfolio From Time to Time.
You should not look at your investments too often.
Growth investments can be volatile over the short term, but it is this volatility that can lead to real growth over time.
However, it is prudent to review your portfolio annually to ensure that your portfolio stays in line with your goals and dreams, and to consider new opportunities that may arise.
I have personally used this investment strategy over the years, and I can assure you that it works! Just keep saving and investing your surplus income, before you are tempted to spend it, and you can “grow your wealth portfolio slowly” by simply sticking to this investment strategy over the long term.
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