There are very few people who are born into wealth. Even less have a unique skill that allows them to make extraordinary money during their career (like hitting a baseball or being a phenomenal singer). For most people, however, building wealth is about doing the things that need to be done over the years. Below are 7 tips to help you grow (and maintain) your wealth to become rich.
1. Salary Isn’t The Whole Story – Saving Is
You’ve probably heard everyday since you were a kid about the importance of savings. Well, guess what. It’s true. A penny saved is a penny earned, and the same goes for thousands or millions of dollars. Saving religiously is the key to increasing your wealth. It’s best to save as early and as often as possible. Robert Kiyosaki’s book “Rich dad, poor dad” is all about this concept.
2. Live Within Your Means
We’ve all seen the person who has an average paying job spending lavishly. Barring the possibility of this person receiving a large inheritance, or winning the lottery, he or she will most likely have or is acquiring a big pile of debt. As they say in Texas, this individual has a “big hat and no cattle.” Spend your money reasonably within your means. Eventually you want to ride your horse into the sunset of financial prosperity, not into the darkness of debt.
3. Investing Is About Time, Not Timing
We’re sure when you were younger, the saying, “Patience is a virtue,” was tossed around a lot. Similar to the importance of saving, this childhood lesson has validity, especially in regards to investing. When it comes to investing, you need to invest for the long term. Do not be a trader or a speculator. Be patient, but also strategic, and allow your investments to grow.
4. Invest Regularly With An Investment Routine
A continuation of the previous tip, put money aside every month to invest. Utilize your company’s 401k plan, a ROTH IRA, or a simple investment account. Establishing an investment schedule will allow you to accurately monitor your financial success, as well as consistently grow your wealth.
5. Obsess Over Risk
Diversify your holdings and use tactical asset allocation. This will allow you to adjust your investments strategically based upon performance, market trends, and other factors. The goal is to improve your risk-adjusted returns.
6. Write Down Your Goals
If you do not establish your goals and a plan, how will you know where you’re going? On top of that, how will you measure success? Create a clear sense of direction and define success with your investment planner. The rich do not become rich and maintain their wealth by accident or randomly. They have a plan, and so should you.
7. Have Great Advisors Who You Are Willing To Pay
A good attorney, accountant and financial advisor are worth much more than what you pay for their services. Choosing those who handle your wealth and investments is an investment in itself. Make a safe and secure one by selecting an experienced and knowledgeable team. It will certainly be worth it in the long run and will keep you prepared.
Ready to start your path to wealth and financial success? Contact Magellan Financial today!
Asset Allocation and diversification are investment methods used to help manage risk. They do not guarantee investment returns or eliminate risk of loss including in a declining market.
