There are two different ways people can become wealthy. The first way is by inheriting wealth, and the second one is by gradually accumulating wealth from zero. Here we focus on the way to accumulate wealth from zero.
In 2015, people around the world became wealthier than ever before, reaching 1,826, as well as a record increases in the number of wealthy individuals under the age of 40 years old, self-made billionaires, and female billionaires than in previous years. In 2021, the number of world’s wealthiest reached to an unprecedented 2,755 person and continue to rise. In 2021, the number of wealthy people in the world became 660 higher than in 2020.
Surprisingly, extreme wealth is growing significantly faster in emerging markets than in advanced countries. And most importantly, wealth is increasingly becoming a self-made, even in advanced countries. Base on the above data, it is clear that it is possible to accumulate wealth from zero, therefore, this article will focus on how to build or accumulate wealth from zero.
Also, the data shows that over half of Europe’s wealthiest individuals inherited their fortunes, compared with one-third in the United States, this gives us another evident that individuals can accumulate wealth from zero, which thus leads us to ask a fundamental question concerning how individuals can accumulate wealth from nothing?
Throughout our website, we address this question. Historically however, among those who accumulated wealth from zero are company founders, executives, politically-connected, athletics, or in employees in finance sectors.
What are the Income that help Accumulate Wealth
Generally, traditional sectors built half of the rise in wealth in European countries, while the financial sector and technology-related sectors are both largely responsible for the rise in wealth in the United States.
This illustrates that individuals who want to accumulate wealth from zero must first have sustainable income, for instance, by simply become an employee in any sector. Although some employees in specific sectors can generate higher incomes than others, which will lead to accumulation of wealth faster, however, getting employed in any position can also trigger the accumulation of wealth.
Income represents the flow of cash that one earns every month or year, whereas wealth is the total stock of assets that one owns, either through accumulation or inheritance. Although income is the primary source of building wealth for individuals, the income itself, however, is not wealth.
Moreover, generating income does not automatically lead to wealth creation. Instead, the purpose of individual is the driver of wealth accumulation.
Thus, the income represent the mechanism of building of wealth. Whereas income streams mostly take the form of cash, wealth components are both financial and non-financial assets. Wealth is also an important metric since it can be inherited, unlike income. Therefore, we must ask ourselves the most important question of what is the importance of accumulating wealth?
Why Accumulating Wealth is Important
The important of creating wealth is that it can determine which opportunities individuals have to create in their lives, whether to approach profitable investments, gain a proper education, or pursue different occupations. However, what is wealth?
As we answered this question earlier, here we are referring to financial wealth; that is, the commonly accepted definitions of financial wealth in the financial market focus on assets that are marketable and thus possible to sell or purchase at a marketplace.
Related to this is the concept of income-generating assets, that is, assets that have a base value and, at the same time, have the ability to produce additional income beyond the inherent value for the investment holder.
Therefore, for those who want to be wealthy, they must use a disproportionate percentage of their income to acquire productive assets. By doing so, they multiply their chances to amass substantial profit from capital gains, thereby building their own wealth from their own income or salary.
The accumulation of wealth can be driven by different mechanisms and can thus consist of a mixture of different income streams. For this reason, we explore a short overview of the main sources of income that can contribute to one’s stock of wealth.
What are the Most Sources of Higher Incomes
The high source of income that represents the most powerful sources of wealth creation are Chief Executive Officer (CEO) or top manager, financial trading, entrepreneurship, and inheritance. And additionally, there are, of course, other sources of income streams, such as income generated by artists, sportsmen, and media celebrities that also contribute to the accumulation of wealth.
Becoming financially independent requires us to step out into the unknown and conquer fear. Doing so suggests that exploring new thoughts and ideas, adopting or acquiring new attitudes and incorporating them into our lifestyle means getting out of that comfort zone.
Having said that, it is not only the ability to adopt financial positive attitudes, plan ahead, and maintain a savings account that leads to financial freedom; another key factor is willingness to save. People who feel little importance in saving and do not recognize the importance of savings are at greater risk of financial problems than those who save regularly.