A young person starting at their first job suddenly realizes that their first paycheque brings with it substantial power. But understanding this power, and how to wield it, is an extremely important lesson to learn. The power of money can create wealth and abundance but if used incorrectly, it can also bring financial destruction.

Your first paycheque can open doors to credit. For every R1000 you earn, you can borrow another R3000 from banks, stores and micro lenders. Suddenly you can buy whatever you want. You don’t have to wait to have everything your friends and neighbours have. You can show the world you have arrived. You have just had a heady dose of the power of money.

What you don’t realise is that you have tapped into the negative power of money. Like any dark power, its evil is not immediately understood. This negative power is the one that leads to financial ruin.

After a year or two you are unable to manage your debt repayments. You start to fall behind and join the statistics of the nearly nine million South Africans who have impaired credit records. If you don’t take action soon, you end up with a negative listing on your credit rating, which can even influence a job application. Employers don’t like to hire people who cannot manage their money. Your life is left in tatters – all due to the corrosive power of money.

To harness the positive power of money, a young person should start saving from that very first paycheque. By investing that money rather than spending it, the real positive power of money is unleashed in the form of compounding interest. This is where interest earns interest and within five years, you’ve saved enough money for a deposit on a home and start acquiring wealth-building assets.

To demonstrate this power, if you save 20% of your salary and invest it in a growth investment which grows at 10% a year, within four years you would have savings equal to your annual salary.

Within ten years you would have accumulated three times your annual salary. Of that total savings 60% comes from your monthly contribution but a massive 40% is from compounding growth. That is money that has grown from savings; you have not had to work a single day to earn it.

So many young people dream of one day owning their own business but they believe they need to borrow money to achieve that dream – yet just by applying discipline from your first paycheque your own business is just a couple of years away.

So if I have one message to send out to young people wanting to grow wealth, it is to understand the power of money – both the good and the bad – and to wield it with wisdom.