Capitals We Need To Create Wealth

You cannot create wealth out of nothing. You put in capitals to create wealth. Capital, simply put, is wealth that is used to create another wealth. Some capitals are acquired while others are naturally endowed. If we do not have the acquired capitals, we certainly have the naturally endowed ones. Hence every one has what it takes to create wealth. Wealth, ofcourse, is a product of work or a product of  the value we deliver. So we can all create wealth in different amount, according to the capitals we possess.

Basically, there are four capitals that are used to create wealth, namely: Physical power, mental or intellectual power, financial power, and material resources. If you look around the society, you will notice that everyone creating wealth, everyone generating income, does so using one or more of these assets. We can also say that wealth creation is the process of applying any of these four capitals you already have to create more wealth. In the process of creating more wealth, these capitals do undergo some sort of transformation. So, we can also say that wealth creation is the process of transforming your existing wealth into another with a view to increasing its value, quality or usefulness. For example, a person pushes a car for somebody and is given N100 for doing that. What has happen here is that the person has used his already existing wealth (his physical power), a naturally endowed wealth to create another wealth, N100 which is a financial wealth ( an acquired wealth). A transformation has taken place,       the physical power has been transformed or converted into financial power, a more liquid instrument. Now he uses this N100 to buy a “mudu” of groundnut, process it, and sell for N200. Here the financial power has been reinvested and it resulted in an increase.

                                                         INFERENCE

From the forgoing, it can be seen that:

1.      For one to increase wealth or value, he has to invest what he already has. Be it physical, mental, material, or financial wealth.

2.      To increase and sustain wealth, you have to reinvest.

3.      The process of creating or increasing wealth can change your wealth from one form to another. For example, physical power, intellectual, and material wealth can be changed to financial wealth. Financial wealth could be changed to material wealth and vice versa.

From the inference above, it can be seen that everyone has what it takes to create wealth. Everyone is investing either physical power, mental or intellectual power, financial power, or material resources to create wealth. But the amount of wealth or income that you might get depends on what value you are able to deliver. The value you deliver, in turn, depends on the quality and quantity of you productive resources (or capitals). In other words, it depends on the potency of your capitals. The more potent your capitals are, the more value you can deliver. Hence, the more income you can get, everything being equal.