When it comes to building wealth, there are numerous avenues you can explore to amass your own fortune. Some of these methods may carry significantly more risk compared to others, so it is important to carefully consider your circumstances, objectives, and risk tolerance. When it comes to finance, strategy is key. Use these strategies as you make investments and grow your wealth.
Save Money on Housing
One of the easiest ways to invest more money for the long-term is to lower your housing costs. Interest rates have been low for several years now but could be headed higher. Now may be a great time to consider refinancing your mortgage into a lower, fixed rate. Be sure to explore all the options available. For example, if you are a vet you may want to look into VA refinancing rates to get the best possible deal.
Make it Automatic
Another simple, yet extremely powerful method for building wealth is to put your saving and investing on auto-pilot. This can be accomplished through regular, automated bank account withdrawals that transfer from checking to savings. You can even have automatic withdrawals sent directly to a brokerage or investment account. Whatever you decide to do, making the process automated helps ensure that you are continually putting money towards your nest egg. In fact, the process is so easy and convenient, it’s hard to miss the money when you never even see it.
Choose Investments Wisely
When it comes to your investments, the choices you make can have a significant impact on portfolio returns. A general rule of thumb is that the longer you have to build wealth, the more risk you may be willing or able to take. In other words, with a longer time horizon of 15 years or more, you may want your savings heavily weighted towards stocks or income producing assets. As you age, you may decide to scale back on risk and gear more of the portfolio towards fixed income or savings accounts.
If you don’t want to deal with learning all the jargon and managing everything alone, Robo Advisors and automated investing tools can help take all the guesswork out of it using tools and algorithms developed professionally (and often the same software that financial advisors use) at a fraction of the cost of human advisors. check out our list of the best Robo Advisors available on the market today.
The sooner you get started, the better. The power of compounding interest can work wonders, helping your money grow exponentially. The longer your capital and investment returns can compound, the more money you can potentially make.
Anyone has the power to build wealth, regardless of income, education, or age. Through some very simple principles, anyone can achieve a significant portfolio and put themselves on the path to financial freedom. The two biggest keys are simply making the decision to get started and then sticking with a plan.