The number of Zambian men and women arrested in various parts of the world for being found in possession of prohibited drugs, such as cocaine and dagga, has risen to an alarming level. There has equally been an increase in the number of Zambians dealing in copper, cobalt, emeralds and rhino horns. The common denominator among all these people is the search for instant riches.

Most of the businesses mentioned above are not done legally and involve methods that often incur the wrath of the law.  

In this article, my aim is to demonstrate that there are legitimate ways of acquiring wealth. I intend to do so by presenting ideas that have been put together by notable wealthy people from the past and the present, as well as teachers and students of wealth creation.

Wealth means different things to different people. For some people, wealth means having large sums of money in the bank or in the house. For others, wealth means being in possession of several properties and large tracts of land. For others still, it means being surrounded by all the things that money can buy. And then there are those for whom wealth means being able to have as many wives and children as they wish.

But really, what is wealth?

In general terms, wealth is the total value of the accumulated assets owned by an individual, household, community or country. However, a more interesting definition of wealth is given by Robert Kiyosaki who defines wealth as the length of time you can survive and lead a quality life-style without having to work to earn an income.

Although there is a symbiotic relationship between wealth and money, the two are not the same thing. According to L Ron Hubbard, the founder of Scientology, money is merely an idea backed by public confidence. It is possible for a person to possess a great amount of money and yet be regarded as poor because of the perceived value, or lack of value, of his or her money.

A good example is what happened in Zimbabwe a few years ago. Zimbabwean currency had at one time become so valueless that one needed to carry a wheelbarrow of Zimbabwean dollars to buy a few loaves of bread!

50 000 Kwacha note - b

Actually, there are some very good reasons for people’s desire to be wealthy (or rich) other than greed.

Wealth enables us to lead a quality life-style and to meet our social and psychological needs.

Our social obligations include providing our family with shelter, food, water and clothes, and helping the less privileged members of society. Psychologically, the ability to meet our financial obligations helps to boost our self-esteem.

But wealth must not be acquired in unethical ways because wealth gained this way is not sustainable at all. The spiritual law of sowing and reaping states that man reaps whatever he sows. Evil thoughts and deeds bear evil outcomes, whereas good thoughts and deeds bear good outcomes.

Unethical ways of acquiring wealth include the following:

• Founding your business on stolen money and property.

• Establishing a business on the basis of cheating.

• Obtaining business deals through the use of bribes. (Business deals obtained through the use of a bribe are an infringement of the rules of fair play and give an undue advantage to the person guilty of this vice. Paying bribes to obtain a service encourages a culture of corruption in society.)

• Usury – the lending of money at an exorbitant rate of interest.

Let us discuss some strategies for acquiring wealth.

The first requirement for creating wealth is a certain degree of financial literacy. A basic understanding of accountancy and finance is essential for one to appreciate the fundamentals of business.  

Kiyosaki says: “Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.” Thomas Tusser has put it another way: “A fool and his money are soon parted.”

It is also important to appreciate a cardinal principle of wealth creation, i.e. the principle of accumulation. Wealth is a cumulative total of gains made over a period of time. (Of course, I am talking about an accumulation of net assets, and not liabilities and debts!)

Wealth is not represented by how much one earns but by how much one keeps. Life is full of examples of people who once led opulent lives but later became destitute. They became destitute because they had not learnt the secret of keeping their earnings.

For most people, employment serves as the first rung on the ladder of financial independence while others prefer to engage in various business activities to make their seed money.

The goal of any business is to make a profit. In simple terms, profit is the difference between income and expenditure. This means that in order to make a profit, it is necessary to produce goods and services, and to exchange them for money at a rate that covers the cost of production and selling, and which includes a reasonable mark-up.

The most powerful method of attaining wealth is through the investment of your money in appropriate ventures. An investment is the use of money for future profit. This is done by depositing money in a bank or buying stock in a company, with the object of making a future profit.

An investment should not be confused with savings. Savings generally refer to money put aside in a bank for future use or for a rainy day. Savings should be converted into investments to make your goal of becoming rich a reality.

An investment may also be defined as a contribution of something of value, such as time, or effort, to an activity, project, or undertaking, in the expectation of a future benefit. The prudent investment of time is one of the most critical factors that distinguishes people who are financially successful from those who are not.

A unique way of acquiring wealth is through the exploitation of your God-given talents. You may be endowed with a certain natural human talent or special gift that can be employed to earn an income – in some cases, an income of major proportions. Think of your talents and special skills as things that can be sold or battered for financial and material benefits.

Whereas it is a good thing to accumulate your financial and material gains, care must be taken to avoid money-losing practices and possessions.

The following are some ways in which money can be lost:

1. Statutory government taxes.

There is very little one can do to avoid taxes. However, it has been suggested that the formation of a limited corporation is one effective strategy for reducing tax paid by an individual, as the liability for tax is passed to the corporation.

2. Inflation.

Inflation is another factor that has the effect of eroding the buying power of our money over time. Today’s dollar will have less value than it has today due to inflation. In this case, money put in the bank loses its value over time. One effective way of minimizing the loss of the value of your money is to invest it in inflation-averse assets.

3. Buying expense-generating possessions.

Buying possessions which have the effect of increasing your expenditure is another way of losing your money. For instance, buying a car means that you will need to spend money you would not have needed to if you had not bought the car in the first place. This money will be in the form of insurance, running and maintenance costs. Unless the car can help you to be more financially productive so that you can recover the money spent on buying the car and bearing the associated costs, you are better off not buying the car, if your goal is to become wealthy.

4. Debts.

Debts are a major cause of poverty. This is because debts have the effect of making us spend future money well before we have earned it. Also, there is usually a cost associated with debts in the form of the interest we have to pay on the borrowing.

One cause of unnecessary debts is the tendency to satisfy your needs instantly rather than wait until you can truly afford to pay for those needs.

5. Impulse buying.

Impulse buying, which is a form of uncontrolled expenditure, has been responsible for wiping away money that could have been invested in wealth-creating schemes. A good habit that will help one to avoid wasting money on unplanned activities is learning to base your expenditure on a well-thought out personal budget. “If it is not on the budget, don’t buy it, unless it is an emergency.”

6. Living beyond your means.

One major difference between wealthy people and poor people is that the former always try to live within their financial means while the latter are prepared to spend money that they do not have.

If the wealthy cannot afford a certain life-style, they are prepared to forego such a life-style until it is within their means to sustain it.

Accumulating our financial gains and avoiding practices that erode our money is a sure way of creating wealth. If the ideas discussed above are faithfully observed, they will make a difference between a life of want and a life of abundance. The good news is that following these ideas will keep you from taking desperate measures that can at best be considered immoral, if not outright illegal.