By Godfrey Kenneth Gobba
Wealth and financial freedom are acquired by owning assets that not only appreciate in value, but also generate a dependable income stream. These could be both physical and financial assets but the most important asset in the wealth creation process, is the business asset.
A business asset is a business that does not need the active involvement of its owners to grow and generate income. It is a business that can function without its owners. A business asset can function on auto pilot which makes it very valuable and sellable.
For you to create wealth and become financially free, you will need to own at least one business asset. Sadly, probably only 1 out of every 1000 businesses that are started by well-meaning people with every intention of creating wealth, qualifies to be called a business asset, the rest are just jobs.
A business that cannot function without you is just another job and that kind of business will never make you wealthy. You might get the ego boost that comes with owning your own business, but you will never experience the financial freedom that comes with owning a business asset.
Salaried folks, students, graduates etc are all being compelled by wealth creation, entrepreneurship and financial literacy campaigns and advocates to startup businesses.
But sadly a large majority of these businesses turn out to be just second jobs.
All businesses initially start out as jobs, but it is the entrepreneur’s responsibility to work tooth and nail to convert that business into a sellable business asset.
Unfortunately, very few businesses eventually become sellable business assets and a large number of entrepreneurs usually end up with businesses that will never make them wealthy.
There are primarily two ways that you can acquire a business asset. You could start up your own business and go through the labour pains required to convert that business into a business asset or you could just buy an already existing business asset.
If you don’t have the time and money required to start up your own business and build your own business asset from scratch, the easier route to financial freedom would be to buy an already existing business asset.
This is made possible by the existence of the Stock Market (the Uganda Securities Exchange) also commonly known as the Equity Market or the Shares Market.
The companies that sell their shares to the public on the Uganda Securities Exchange or on any other stock market have successfully been converted into business assets by their owners.
These companies function on systems that can be implemented by anyone. They grow and generate profits independent of the active involvement of the original owners. The owners could go on holiday for the next 5 years and these companies would still function smoothly.
These business owners are now wealthy and financially free because they own business assets that make them money whether they get out of bed or not. If you owned the same business assets, you too could eventually experience wealth and financial freedom.
So by using your savings to buy shares / equity in the companies that trade on the Stock Market, you would be acquiring ownership in business assets that will grow your savings and also generate for you an income independent of your physical labour eventually creating for you wealth and financial freedom.
By investing your savings in the Stock Market, you also position yourself to share in the wealth and prosperity taking place in the economy as a whole.
So don’t be left behind. Embrace the Stock Market.
The author is CEO, African Investor Academy