Building Capital Before Acquiring Assets: A Strategic Approach to Sustainable Growth
When it comes to business and personal finance, no one knows it all. We keep learning from people, situations, trends, etc while growing. Fortunately, I'm glad I can be teachable to learn new strategies in growing businesses; I said so because certain people feel attaining a financial height will make you not keep learning, gaining counsel, and the rest. From my end, as a business enthusiast, I seek counsel from those who are ahead of me and are doing well in the field of business.
While having a chat with one of the successful businessmen, I shared my vision of how I wanted to get a landed property using the little money I gathered. In a quick response, he said, "Don't do it, build your capital." Initially, I regretted meeting him at the first instance, but when I got home to think about his reasons for saying so, I affirmatively went with his idea.
Every era has its strategic approach to growing businesses; before now, assets were seen as a crucial tool used to sustain wealth. Today, even though we use the conventional tactic, it's redefined based on the experiences of seasoned businessmen and women. One of the top investments is real estate - especially landed property. According to my understanding, "starting small" is misinterpreted in its context. The wisdom behind that phrase is being able to grow a sustainable business that will birth all the assets you need.
What do I mean?
Here's an era where building capital is prioritized over assets. Why? Taking my situation for instance, if I use all the money I have to buy land, how will I survive in subsequent days knowing that I bought it with all my money? Before I can develop the land for cultivating fruits and vegetables, it will cost for buying fertilizer, weeding, and buying of seeds, suckers, etc. Meanwhile, the capital was replaced with assets.
Build Your Capital
As appreciative as landed property would be, it demands high maintenance. Also, anything that is intended to be done on the property, should yield profitable returns than the capital. Such pressures can be displaced if one steadily builds capital that can result in affording over 10 landed properties in the long run. This demands having a long-term investment mindset.
Practical Steps to Building Capital
Increase Savings:
One of the ways to grow your capital is by minimizing your expenses and focusing on increasing your savings. At the same time, having multiple avenues of earnings can help grow your capital even while acquiring assets.Invest in Yourself:
Gaining a skill offers you opportunities that can increase your earnings. As you keep improving in the skill, your value increases over time thereby creating room for investment.Networking and Mentorship:
Just as I did, it is advisable to engage with mentors who would offer advice and opportunities to you. This engagement can create a good social network for other top business moguls. As we know, learning from others’ experiences or mistakes can provide insights and shortcuts to building one's capital.
Conclusion
From the above conversation I had with a business mogul, it is not a general theory to employ but it is a sensible technique to imbibe. Still to add to it, prioritizing the building of capital, positions you to make more strategic, informed investment decisions which leads to financial success. Finally, patience and strategic planning are essential requirements needed to earn this successful financial journey.
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