For over three hundred years, our personal needs have continued to show change. In the early days, our main needs were that of food, shelter, and clothing. To have these very basics was seen as a quality lifestyle.

As time went by and humans became more evolved, our needs also covered such things as insurance, healthcare, holidays and the list goes on. People sought to control their own lives and their destiny by creating their own future.

With this evolvement comes a need for changes in the mindset of corporations. What worked in the past may not work now as people continue to make their own rules and behaviours in the marketplace.

Take a look at Ebay, one of the fastest growing companies in the world. Ebay generates a method through which buyers and sellers can meet their own aims. This happens because they listen and support the ever changing needs of its users. In this way, they build relationships of trust and commitment within their community of users.

Ebay appears to have recognised the importance of relationships. Adversarial behaviour that is only designed for profit has no place in the modern marketplace. These tactics have been replaced by a support network where the behaviours of all concerned are in alignment with the payer. This alignment leads to more profits and wealth distribution.

So, knowing all of this, how do we create wealth in the modern century?

Firstly, it is vital to remain aware of the current trends in the stock market and in the economy in order to make timely investments. It is easy to find this information by reading the newspapers and other publications related to finance and investment strategies. The internet is also a wonderful source of this information. This information may help you to recognise a good investment opportunity that you may otherwise miss out on.

Of course, how you manage your current funds can also impact on your creation of wealth. Your spending habits may need changes made so that you are able to invest your current funds to earn dividends, thus making you wealthier over time.

In the current trend, assets are more evenly distributed. The consumer has become the source of value and our wealth and wellbeing has become of great importance to them. Their yearnings are what now drive the marketplace and therefore, the creation of wealth.

This can only be done when there is a bond of trust and commitment signifies a relationship between the vendor and the consumer and this leads to distributed assets. People and information are the important factors in achieving this relationship and leading us away from the old form of capitalism where the profits went to the managerial few to a new and fairer form of capitalism in the form of distributed assets.

Basically, if you want to create wealth and therefore, create your own future, you need to understand money and how it can work to earn money for you. You don’t need to have a fortune in order to make more money or to accumulate wealth.

What you do need is self discipline and consistency with your savings and your investments. This does not mean having to deny yourself of all of the creature comforts. Just adopt some simple measures to save money and become rich over a period of time. There are many get-rich-quick schemes around but sticking to the tried and true is more likely to get you the wealth you desire in the long term.

It is not at all uncommon for those in retirement and near retirement to be concerned about the amount of cash distributions their investment portfolio is paying. Often, their objective is to be able to live off this cash and, thereby, keep their initial capital intact.

Typically, such investors understand they need to be concerned about the long term safety of their portfolio. But, at the same time they require some scope for capital growth to avoid the possibility that they will run out of money.

Therefore, they tend to go towards a balanced/growth type portfolio, allocating 40-50% to what they consider “defensive” assets and 50-60% to “growth” assets. Provided their asset allocation has been determined appropriately (see “The Asset Allocation Decision”), this sounds eminently sensible.

However, their focus on cash heavily influences the types of “defensive” and “growth” assets they choose. These choices may, in fact, totally undermine their asset allocation decision.

When selecting “defensive” assets, they are attracted to higher yielding alternatives than offered by government and high credit quality private issuers. They consider such investments as mortgage funds, hedge funds and various types of hybrids. These are designed to look like fixed interest investments but with varying doses of equity risk thrown in. More potential cash is the lure.

For their growth assets, they are attracted to high yielding, fully franked Australian shares – particularly, bank shares. And, at least until 2008, high yielding listed property trusts appeared to offer both high cash distributions and some prospect of capital growth.

Many financial planners, particularly those with links to stockbrokers, are only too happy to help their clients build these apparently “conservative”, cash rich portfolios.

More risk than meets the eye …

We believe that such portfolios are fundamentally flawed. They result in significantly more risk being taken than may be necessary or understood by their holders.

For a detailed view regarding of approach to investment, see “Foundations of Financial Economics”. However, in summary, the shortcomings include:

1. Maximisation of cash distributions is never likely to be an optimal objective for an investment portfolio. In most cases, the goal should be to maximise after-tax returns for the risk taken.

An investor should not care how returns come (i.e. as income or capital). In many cases, it may be preferable to sell assets (and even pay capital gains tax) to generate cash to live on, rather than hold inappropriate, high yielding assets;

2. We think the purpose of defensive assets is to reduce risk and portfolio volatility, rather than to enhance return. Defensive assets should be as safe as practically possible, implying very high credit quality and short maturity.

High yielding fixed interest products always mean higher risk, although it may not be apparent. They are most likely to let you down when markets are under stress. Just the time when you are relying on the defensive component of your portfolio to do its job;

3. If you need higher total returns, you should look for the growth component of your portfolio to provide them. Research has shown there is a structured way to take this “growth” risk (see “Risk and Return are related”).

A concentrated portfolio of bank shares and/or listed property trusts would not be expected to provide adequate return for the risk taken; and

4. A focus on cash returns is inconsistent with our view that you should diversify as broadly as possible to maximise after-tax returns for a given level of risk (see “Diversification is key”).

For example, it will bias share selection to high yielding, fully franked Australian bank shares in preference to, say, lower dividend paying resources stocks or international shares. The resulting bias adds to your portfolio risk (it is called concentration risk), but has no expected return.

Total return for risk is what counts …

An objective of maximising cash distributions from investments is an example of what we consider to be a breach of the decision making principle of “It’s about ends, not means” (see “Foundations of Decision Making”).

Usually, the appropriate aim is to ensure that there are sufficient financial returns to enable you to live the life you want. It really does not matter how the returns come i.e. as income (cash distributions) or capital growth.

What you need to be more concerned about is that the returns are adequate for the risk taken, the costs incurred and the taxes paid.

The promise for new businesses is based on the ability to create new and growing options by using technology.  One of the known areas that is introducing businesses to a new platform for sales is the Internet.  This trend is one that is changing the face of business and how individuals utilize tools to build and create wealth.  If you are ready to find a niche on the Internet for your interests, then considering the knowledge available for the basics is the beginning to creating your online treasure chest.

The concept of building a business online begins with understanding what it takes to create a complete system for online wealth.  Through the right set of knowledge, you have the opportunity to define and grow your own business niche with technology through simple steps that help you to grow your online options.  If you are not familiar with the Internet and how it works, you want to make sure that you can find simple, clear and concise options for building substantial income.

A complication that many are running into with building a business online is that there are not substantial guidelines that are needed to work into a successful Internet business.  This includes basic information, such as building a website and finding ways to draw customers.  For instance, many won’t let you know that having a domain is vital to grow your business.  Adding in a website with your products and information is also an important platform for your business.  The secrets then move into an understanding of how to direct traffic to your site, while allowing you to get the results needed.

As you build your knowledge with the Internet, you can begin to move your products or services higher in search engine rankings, while finding individuals that are interested in your website.  Finding the guidelines and solutions that are used to find customers and answering the basics about how to work into an online business allows you to move into long term results with your business.  Whether you want to have a secondary set of income coming in or are interested in building a store front as your main business, this book can work as an effective option for getting into the basics of Internet stores.

If you are introducing your brick and mortar store to technology or want to find extra opportunities for substantial income, then using the Internet is one of the growing opportunities available to everyone.  Investing in the knowledge needed through areas that offer clear information is the beginning to working your way into technology for business. This includes the basic guidelines that are available to the extras that are needed to create your own prosperity and abundance through the use of technology.

To learn more about making money online, check out the free Internet Wealth report. Feel free to distribute this article in any form as long as you include this resource box. You can also include your affiliate link if you sign up at Clickbank Pirate>.