Broker Check
What Should I Know About Wealth Building Strategies?

What Should I Know About Wealth Building Strategies?

| November 02, 2017
Share |

I recently attended a social event for young professionals and was listening to a small group talk about the challenges of building financial security. It made me think. As an independent financial advisor in DC, I often meet with clients whose plan is focused on saving money – how much can they put aside. I know that a savings goal is the best way to start, but that there is a difference between just saving money and building wealth. Here's what I tell my clients: 

The actual key to building wealth lies in creating assets. Regardless of how much money you make, you can build wealth over time through assets. Some people make $100,000 a year and manage to be worth millions of dollars. Others make millions a year and are living in debt. It comes down to how you manage your money and your wealth building strategy.

Set Goals for Your Investment Strategy.

When your focus is on building wealth, a clear goal of financial independence or early retirement is necessary to keep you on track. Determine how much you need to invest each month to meet your goal. Then you can set up accounts that allow you to make automatic deductions or contributions each month.

Stick to Your Personal Budget.

There are some things you can do to prepare for investing.

  • Pay off debts. If you are paying interest on the unsecured debt, you will probably pay more in interest than what you will earn on your investments.
  • Set up a separate emergency fund. You may also save up for things like home repair and vacations.
  • Invest ten percent of your monthly income. If it is in addition to your retirement savings, this strategy will help you begin to build wealth and retire comfortably

Take Advantage of Employer Plans.

The sooner you start a retirement account, the more time your money has to grow and take advantage of compound interest. Take advantage of employer-sponsored retirement plans. Having part of your regular paycheck withheld automatically prevents you from spending it. This process makes it a compelling investment option and saving even 1 percent of your salary now could be worth much more by the time you retire. Increase your contribution with each raise you receive – you can't miss what you didn't have!

Get Help from a Financial Advisor.

You don't have to do this on your own. Unless you have expertise in finance, consider getting help from a professional advisor. An independent financial advisor will listen to your goals and help you create a financial plan to achieve them. There are various investment options, like stocks, bonds, and money market funds that can be used to build your investment portfolio. Your financial advisor should be able to explain all of this to you.

Have questions? Get in touch today!

Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.

Share |

'); }); Web Analytics