|
|
September 2011 Tips for building wealth
Some
wealthy folks hail from a long line of aristocrats and industrial
magnates. A lucky few win the lottery. But about 80% of the
millionaires in America are "first generation" rich. They're the first
in their families to have attained a high net worth through traditional
means. How did they do it? Many of these folks developed small
businesses over decades; others earned advanced degrees in demanding
fields. Most followed simple principles that the rest of us can apply,
including the following.
- Avoid debt.
If you can pay cash for an item, do so. Only take out loans for items
that will likely generate a return on investment, like a house or an
education. Paying interest leaves less money in your pocket for
building wealth.
- Invest in equities.
With the volatility of the stock market in recent months, many people
are pumping their money into bank accounts, certificates of deposit,
and Treasury notes. If you have a long term horizon (say, five years or
more until you'll need the funds), a well-diversified portfolio of
stock mutual funds is still likely to be a wise choice.
- Value education.
Especially in certain professional fields (such as business,
engineering, healthcare, and law), you can expect a college degree to
pay off over time.
- Live within your means.
As the old saying goes, "You can't get ahead if you're always behind."
Curbing your spending habits requires discipline. Watching your
neighbor park his latest toy in the driveway (often purchased on the
installment plan) may be irritating. But building long-term wealth
isn't about keeping up with the Joneses.
- Pay yourself first.
If your company offers a 401(k) plan, contribute as much as possible
directly from your paycheck. If you're in business for yourself or work
for a company that doesn't offer a retirement plan, investigate other
retirement plan options and make annual contributions.
- Work hard.
Never underestimate the value of your own labor. Life isn't always
fair, and some lazy people have risen to the top. But most folks who
have developed profitable businesses or found success in their
professions have earned that position by focusing their energies over
long periods.
- Don't give up.
Along the way, you're certain to encounter obstacles — unanticipated
expenses, job losses, market setbacks, unappreciative bosses. Don't let
them sidetrack you from your financial goals.
Securities offered through 1st Global Capital Corp., Member FINRA, SIPC
Investment advisory services offered through 1st Global Advisors, Inc.
Insurance services offered through 1st Global Insurance Services
| |
