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Ethical Wealth Creation: How is it possible?

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December 14th, 2022 06:51

Introduction

The abundance of wealth! Who doesn’t want that? How to generate wealth? Investments are the most popular means to generate wealth in today’s time. 

By investing in strong and sustainable sources, along with your financial literacy, you will ensure a stable wealth generation. Everyone wants to “get rich." Although the goal of a comfortable life is not unethical, making wealth through unethical means is an issue in society. Ethical wealth creation must be a necessity for society. With stringent laws and corporate governance standards, any community can regulate unethical wealth creation. 

The "making money" approach without ethical barriers can harm your personal and professional lives. There is a question: Is it even possible to create wealth ethically? The answer is yes! It is 100% possible to create wealth ethically. 

Here are a few tips to start generating wealth:

Get Financially Literate

Financial literacy or basic financial ethics are often undervalued at schools. The world produces millions of graduates every year, and they are literate to understand everything in society. But many of them are not financially literate.  

Individuals must develop an understanding of finance, wealth, investments, and accounts. Although you can not learn this at school, there are ways to excel. You can read books such as ‘Rich Dad, Poor Dad’, ‘The Intelligent Investor’, and ‘Think and Grow Rich', which are only a few that impart financial knowledge. 

There are hundreds of books to understand and learn finance, money-making, and management. Besides, magazines, podcasts, documentaries, and videos on YouTube can help an individual learn about money.

Learn Financial Management

Financial management differs from financial literacy. While financial literacy is the skill set that an individual possesses to make well-informed decisions relating to money, financial management is only a branch of it. Financial management is the art of analyzing one’s income and expenses to perform activities such as saving, investing, spending, etc. You can have endless amounts poured into your account, but without the dexterity to manage them, that’s as good as being poured into a leaking vessel.

Various tools can be used to learn financial management, such as apps that can be downloaded, such as the Mint app. This app allows budget creation and tracking, and the Personal Capital app allows tracking of investments and budgets. The most effective way to learn how to manage finances is through financial management tools. 

Wealth creation isn’t just about making money, it is also about management.

Investing

Wealth can be generated by investing in those sources that gain value over time. The investment could be in stocks, bonds, assets, businesses, etc. Investment is a huge field and is not just confined to the stock market. It is advisable to diversify investments instead of investing everything in one source. 

As the well-known investing quote states, ‘Don’t put all your eggs in one basket’. Investing ethically is a long-term source of continuous wealth.

Break the ‘paycheck-to-paycheck’ cycle

One of the most efficient ways to create wealth is by becoming an entrepreneur. When you live paycheck to paycheck, you seldom have enough money to invest or accumulate wealth. It is a tedious and endless cycle. Breaking the living ‘paycheck-to-paycheck’ cycle helps build wealth and not just money.

Live Frugally

How to live frugally? It is the act of being cautious and vigilant about spending. 

Prioritise spending on things that are a necessity instead of wants. Spending in a prudent manner often leaves enough to invest in various sources and help create wealth. Budgeting monthly, being calculative about spending, planning meals in advance so as not to overspend on inventory, downsizing, and getting a part-time job are a few ways through which one can save money and live frugally. 

Frugal living does not mean an uncomfortable life. It is about controlling your income in such a way that other financial goals are achieved.

More often than not, wealth creation is an ethical activity. It is the transferring of wealth that can be immoral or unethical. "Wealth" does not mean being a millionaire or a billionaire. By making smart financial choices, one is in possession of more than enough money to meet one's needs. Financial education is the only thing that can teach one how to create wealth and grow financially. The most effective way to create ethical wealth is to create it legally and morally. 

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