“I am thinking of growing my wealth.”

Whilst it doesn’t happen very often, it should because growing wealth is not some magic formula – “thinking of growing wealth is simply a financial strategy”. Very few young people (age 20 – 35) we meet have a goal of creating wealth. Most middle age couples are striving to repay debt and bring up a family. Their ‘wealth creation’ consists of – at best- a hoped for replacement of income at age 65.

Wealth creation for many retirees is an anathema – they want the security of an income which will provide them a lifestyle, sustainable for another 20 – 30 years. Wealth to them is friendships and income.

So few people a) consider that growing wealth is a viable goal b) believe its achievable c) have any idea what wealth means – therefore generation follows generation of a pre-conceived attitude to wealth creation.

The best time to consider wealth creation is whilst in your 20’s. If the financial habits necessary are formed at a younger age, it provides huge advantages for later life, because the disciplines of finance help with the disciplines of life. They are correlated. Like multisport. For many years sports people specialised. Today the best understand that not only is swimming, running and cycling more enjoyable than specialising – each discipline helps the other.

The tips and traps for creating wealth? The first is time. Whether growing wealth through business or via investment, time is beneficial. The greatest investor ever – Warren Buffet is an Octogenarian and his partner Charlie Munger is 91. Steve Jobs and Bill Gates did not have instant success with their global giants – Apple and Microsoft. They each had the technical competence to achieve success but this alone is not sufficient. The world is filled with people of technical and academic competence, many of whom are destitute and most of whom are certainly not wealthy. Time gives people the opportunity to accumulate, test and measure – whether investing or in business. It also allows the compounding affect of interest to work its magic and for business to build reputation. Whilst the greatest invention in my time (the internet) has created the opportunity for instant millionaires through businesses such as Twitter, Facebook, and Google, one would need to assume that these success stories are not likely to proliferate. The growing opportunity for NZ’s own Xero is an example of a great product, good people and a global market. But it’s no instant success.

But what Warren Buffet, Steve Jobs and Rod Drury had in mind was a definite goal and purpose in life, and each required the time to develop their vision. Wealth followed. For the best opportunity to create wealth – time is your friend.

Understanding what wealth might mean is important. Whilst a freehold home and a six figure income with a cash reserve of 2 million in investments might satisfy most, others may desire much more. What is important is to have a series of goals which determine your definition of wealth, the strategies to accomplish the goals, the people on call to best assist, the action plans necessary to implement and the time to accomplish. When a couple can agree and maintain focus to this type of success strategy through – test, measure, review – their  chances of having both an enjoyable lifestyle and to ultimately achieve fulfilment, then their wealth creation goals are magnified. The synergy is a multiplying factor. Having a definite series of financial goals is important and an advantage coming from shared and mutual expectations. A couple with distinctly personal and independent desires and expectations will never achieve wealth – in lifestyle or goal achievement as a couple. The same in business, whether life partner or business partner(s). ‘Not on the same page’ means guaranteed disharmony. Many successful businesses have the leadership of a strong character with a very strong personality; fewer successful businesses have multiple owners. The dynamics become a strategy in themselves – keeping the focus and keeping the peace. But it can be done – in the home and on the factory floor – with synergy. But it’s harder to achieve.

Assuming that people have the time and clarity of outcome (time purpose and goals), what’s then needed is the choice of principles with which to maintain thirty or forty years of consistent focus. That’s not easy. Living life ‘on purpose’ and consistently following a guiding set of principles is almost impossible on ones own.

There are three principles. Faith, Patience and Discipline. Faith in the economic system and the democratic process of governance. Without faith in these fundamentals, doubt clouds and invades decision making. Daily ‘positive’ decisions are critical. You either believe in the system of economic growth we currently experience (i.e. productive businesses grow and build things – and hire people) or you believe in a more socialist philosophy of government ownership and control. Maintaining the faith is critical. Patience follows ‘the faith’. Capital markets and the capitalist system are volatile and cyclical. Whilst recessions are temporary, they are regular, and volatility fatigue from market adjustments can test the most hardened investors. Maintaining patience is a principle of mental capability and emotional capacity. Most succumb because ‘the faith’ becomes clouded by external influence and continued 'headlines’ of doom. Taking instruction from ‘the leader’ is important. In times of duress hearing from ‘the captain’ is both calming and influential. The discipline to continue following the plan is tested many times through 30+ years of (accumulating) creating wealth and thirty years of investing. The role of a good financial adviser is to help you ‘write the plan’ but more importantly to ensure you ‘stay on plan’. The plan changes only when and if the goals change, not because markets change. Faith, patience and discipline seem uninspiring motivators for making money. Your behaviour is the key to your success – without a plan and set of principles the capability to stay ‘on purpose’ and ‘on track’ will deviate. They are your guiding principles.