They say money can’t buy happiness. But money can buy security and peace of mind.
In order to get there, you need good financial advice to help you build wealth, both in the long and short term.
Don’t be intimidated. Building wealth takes time, but we have some solid advice you can follow to help you get there.
Here are 7 must-know wealth-building strategies you can put to use to improve your financial future.
1. Develop the Proper Mindset
First and foremost, you need to have the proper mindset. If you want to build wealth, you need to believe that it’s possible.
If your mindset is that you will never be able to retire, or that saving is pointless, you are already setting yourself up for failure. Successful people don’t have that mindset. You need to believe that you can and should build wealth and that it’s important to your future.
Building wealth isn’t about just you. It can be about leaving something behind for your family so that your children and grandchildren can have a better life. Or it could be about living comfortably on your own as you age, and making charitable donations to causes you love.
2. Create and Track Goals
There are 3 types of wealth goals you should be setting: short-term, mid-term, and long-term.
Short-term wealth goals could be building an emergency fund, creating a budget, and paying off credit card debt. Midterm wealth goals could be paying off student loans or buying your first home. Long-term goals would be saving enough to retire and make a transition.
The goals can be tracked in an Excel spreadsheet, written down on physical paper, or tracked digitally via a smartphone app. Use whichever method you think will work best for you. The method isn’t important, what’s important is tracking your goals.
You should also track your overall progress.
One way of tracking your overall progress is by determining your net worth. Your net worth is the total value of all of your assets, minus any debts. You can either list all assets (house, automobile, savings accounts) and debts (credit card, student loans, auto loan) yourself, or you can use a net worth calculator to make it easier.
Tracking your progress is good for tricking your brain into good financial behavior since it positively reinforces good behavior.
3. Be Optimistic
Be optimistic about your financial goals. That doesn’t mean blindly ignoring your problems and taking zero action. It means being a positive thinker, making plans, and taking action.
It means adopting practical optimism. Practical optimists go through the same struggles as negative thinkers. They have their hours at work cut, they lose their jobs, and they experience sudden costly expenses like car repairs and medical bills.
But practical optimists can bounce back. They can continue their education, maintain a budget, commit to their savings goals, and stay on track for retirement.
An optimistic investor is less prone to giving up. They understand that not all investments will succeed, but they also understand that not all investment options will fail.
4. Pay Yourself First
What does it mean to pay yourself first? It means always prioritizing your financial future, and having it at the forefront of your financial strategy.
Maybe you can’t spare much at the moment, but if you can save a small amount each week or month you will be able to pay yourself first. Treat these funds as untouchable funds, and put them towards investing and diversifying in your different investment assets.
If you’re tempted to spend, look into making your investments automated, so there’s no way you can touch your investment funds.
Paying yourself first is part of developing a proper mindset towards building wealth.
5. Time in the Market Beats Timing the Market
There’s an old saying that “Time in the market beats timing the market.” That means investing early and letting compound interest and the snowball effect come into play, and patiently watching your dividends grow.
To see the full effect of the dividend snowball effect requires patience, long-term planning, and leaving your money untouched.
6. Have a Budget
A budget is an essential tool of any wealth building strategy. A budget will allow you to save for your future goals, as well as see where you are allocating the rest of your funds.
Budgeting may not be very exciting, but without it your finances are going through a sieve without you realizing it. Make a budget and stick to it.
7. Spend on What You Love
If you have a budget, you can spend on what you love. That’s going to look different for everyone, but it could mean cutting back on expenses like eating out each week, and instead spending on vacations with your loved ones, or simply saving for the future.
You will get the satisfaction of being able to spend more on something you love, which provides long-term satisfaction.
Our Final Tip: Choose TAAG as Part of Your Wealth-Building Strategies
By following these 7 wealth-building strategies, you will be well on your way to financial success. It’s not too late to get started. The sooner you start, the better off you will be.
And if you’re looking for someone to help manage finances and support you as you create wealth, TAAG can help. Our fee-only financial planning model ensures your financial health is always in good hands. With TAAG, there are no referral fees, incentives, or commissions. We simply get paid for our advice.
Create your financial goals, and then contact us to help you realize them.