According to a recent article in DIE BURGER by Elma Kloppers, there are 7800 dollar-millionaires in South Africa. Let’s put this in perspective:
If 1% of the population were dollar-millionaires, the number would have been 500 000. But with only 7 800, it means that less than 2% of 1% (0.02%) of South Africans are Rich enough to retire reasonably comfortably.
What is dismal figure!
Luckily their is a way out. You can retire with a net worth much less than $1 million, but then you have to plan properly using your Financial Freedom Map.
Before I explain, let’s just have a look at what a Net Worth $1m will afford you.
The average dividend on $1m invested in the Stock Exchange is 3%. That will give you $30 000 of Income for the year. If you are not going to draw any of your capital (the $1m), then that’s it. Your income is $30 000 per annum.
Hardly enough to cover Groceries, never mind Toys and Memories!
At least your Capital will be protected against the erosion of Inflation, and so will your Income (dividends), if Invested correctly. This means that natural growth with cause your Dividends as well as Capital ($1m) to grow by at least inflation, on average, every year. But the buying power will stay the same. In other words, if you can buy 2 BMW’s with your $30 000 today, you will still be able to buy 2 BMW’s with your then $300 000 in 12 years time.
What about the rest of us?
If you follow your Financial Freedom Map and create Multiple Recurring Growing Passive Income Streams, then you will know that your can be Free with a Net Worth well under $1m. In fact, you can theoretically be Free with Zero Net Worth. (I’ll explain that in another article).
The only way, off course, is to create Income Streams using Leverage. Something that Business do every day to create Income and Wealth, but something the average person is denied as a result of lack of knowledge, due to our ancient education system.
How to use Leverage
The most popular way of achieving Financial Freedom, is to use Other People’s Money (OPM), the banks, in order to buy Rental Property.
More and more New Rich use the Internet to Leverage their Knowledge and Time in order to create Growing Income Streams. But more about that later…
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