Team work on wealth creation

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Have you ever wondered why an insurance company is prepared to insure your car for a small premium? Why is it that majority of the greatest companies are publicly owned? Why are unit trusts considered safer for a new investor? This shows the power of team work on wealth creation.

Many people can agree on how challenging it can be to generate wealth. Many people are struggling to get out debt and investing is the last thing in their minds. This justifies why it is difficult for an average person to invest money.

It is a fact that you need money to make more money. Raising this money can be a daunting task. Many can argue that you can use debt to start a business or to invest but the reality is that debt is not easily accessible to a common person.

So is this an excuse for remaining in poverty? Absolutely not. There is another option that has been proved to work very well – team work!

How team work makes wealth creation easier

Basically to generate wealth you only need two things:

• acquire assets that bring in money (e.g buying property , investing on the stock market or starting a business).
• reducing liabilities that increase your expenses (e.g paying off debt fast or selling the car you don’t need).

Note that for your wealth to increase, the income you generate should exceed your expenses. This seems easy to do right? Not so fast! Buying these income generating assets or reducing liabilities is not an easy task. You can still do it alone but it takes time to do so. This is why team work on wealth creation is a very good option.

The following are some of the reasons why team work is great:

1) Easier to raise capital

Suppose you are only able to save R 1 000 every month. This can be very difficult for you to invest in property considering that you may be required to make a deposit of at least 20% of the property value. Additionally, you are required to pay transfer and registration costs which can make up to 10% of the property value.

With your monthly savings of R 1 000, it can take you more than 5 years before you have enough money for deposits and other costs.

Suppose you have friends who share the same goals with you, you can raise the money together. You can form a private company and buy rental properties. As you get the rental income from one property, it becomes easier to acquire more properties.

Team work makes it easier to raise the initial capital you need to start a business. Some people are fortunate to come from rich families. For those who do not have a firm family financial support then collaboration with friends can be the best option.

2) Sharing of risks and expenses

The main reason why insurance companies are prepared to insure you is that they can pool the risks of many people together. This justifies why you pay lower and stable car insurance premiums in comparison to the value of your car.

Additionally, let us discuss how you can optimize your personal expenses by involving friends. Suppose you are staying in the same neighborhood and you also work in the same town with your friends. You can use one car to travel to and from work thereby saving money you could have used on fuel.

3) Sharing of skills

It is very difficult to find a person who is good on everything. Some people are good on selling, others are good on managing while others are great on analyzing the data. A company needs all these skills to survive and adapt.

If your company is limited to your skills only, then it takes time for it to grow. The most important question to answer in a business is the Who question. Each person comes with his or her own strengths that can benefit the company.

Moreover, another advantage of team work on wealth creation is that one person’s weaknesses are complimented by another person’s strengths.

4) Mistakes are easily avoided

One of the great limitations of creating wealth alone is that your emotions have a lot to dictate. Emotions can lead to mistakes on judgement and this can create big financial costs. Team work will ensure that a new identity is created which reduce the effect of individual emotions.

Summary points

Team work is very important on wealth creation. It ensures the following:

• Easy to raise capital,
• Unnecessary mistakes are easily avoided,
• Risks are pooled together,
• Expenses are minimized,
• Skills are shared.

Therefore, you accumulate wealth faster when you collaborate with others and you may not give up easily.