People may have totally different goals for wealth building and wealth may have different meanings to an array of people, regardless of how affluent they are. There's one thing in common that financial planning is the key to the successful wealth building regardless the wealth building strategies they use.
Investing in "paper assets" is a great way to start building wealth. It teaches you the principals of money management, capital, rates of returns, risk etc. You can invest in stocks, bonds, mutual funds, commodities, and foreign exchange ("Forex"). Each of these options presents various levels of risk and reward and requires thorough research before you start. You don't necessarily have to read the Wall Street Journal daily or subscribe to Fortune magazine in order to be a good stock investor. But you should at least get trained by an expert or have access to wholly independent financial advice from an experienced investor. To help you get started, a basic overview of the paper assets investment landscape goes like this: There are 2 types of investments; ownership investments in which you own part of the asset (a stock is a good example) and loan investments in which you lend money to someone and they pay you interest (a bond is a good example). In many cases, you are looking for growth investments and those are ownership-type investments. (Bonds rarely provide a way to make you wealthy. Rather, they are a way to protect your wealth once you have it). Warren Buffett is a great example of someone who created massive wealth through investing in paper assets.
This is my story. This is a story as much about my personal development as it is about being able to learn and build great fortunes over and over again. Yes, it is about your finances as much as having a great family. You see I grew up on a farm, but one day, as a young man in my late teens and living through one of the worst periods of my life, I stumbled across four of the wealthiest men I had ever known. As fate would have it, they became my mentors. But truth be told, it was they who maneuvered me into their world of high flyers and jet-setters. I had to learn the hard way. It was certainly no free ride.
If one of your goals is to have one million dollars of net worth by retirement one option is to put $300 a month into your 401k plan and choose S&P 500 stock market index fund. If you're 35 years old now and plan to retire at age of 65, you'll gave exactly one million dollars 30 years from now assuming the SP index repeat itself in performance at the rate of 10% return.
Starting, or owning a business is another common wealth-building strategy. Starting a business doesn't always make you really wealthy right away. It takes time and energy to build the income of a business and its capital value, but it can make you wealthy over time if managed effectively. Therefore, if you have previous experience of running a business it can sometime makes more sense to buy an existing business and simply run it better. Want to know how to build wealth starting or owning a business? Find something that you love to do and that solves the needs of a target market. Then sell that product or service through relentless marketing and sales. Create efficient systems to sell more, more often. And work towards growing the value of your business by making it less dependent on you so that you can eventually sell it to a new owner. Bill Gates is a great example of someone who created serious wealth by starting a business.
My early mentors then were in my life situation, my maternal grandmother who was essentially my mother and my paternal grandfather who played the role of father to me. Grandmother taught me to give aid to people to help them get on their feet. She would never allow a child to go hungry; even the lost children that lived on the streets in the days of my childhood. Grandfather taught me the importance of building the family. The family is a great part of your wealth building foundation. He made sure I was introduced to the skills of working well in any situation. He gave me the knowledge of the ancient world; the old texts and philosophies of building wealth. Are these people my only mentors? Let me explain. They were the most impacting in my life because they were the ones that guided me in my formative years; first as I grew up and then as I was a total neophyte of international business. Together, they formed my foundations to greater things in life.
Investing in "paper assets" is a great way to start building wealth. It teaches you the principals of money management, capital, rates of returns, risk etc. You can invest in stocks, bonds, mutual funds, commodities, and foreign exchange ("Forex"). Each of these options presents various levels of risk and reward and requires thorough research before you start. You don't necessarily have to read the Wall Street Journal daily or subscribe to Fortune magazine in order to be a good stock investor. But you should at least get trained by an expert or have access to wholly independent financial advice from an experienced investor. To help you get started, a basic overview of the paper assets investment landscape goes like this: There are 2 types of investments; ownership investments in which you own part of the asset (a stock is a good example) and loan investments in which you lend money to someone and they pay you interest (a bond is a good example). In many cases, you are looking for growth investments and those are ownership-type investments. (Bonds rarely provide a way to make you wealthy. Rather, they are a way to protect your wealth once you have it). Warren Buffett is a great example of someone who created massive wealth through investing in paper assets.
This is my story. This is a story as much about my personal development as it is about being able to learn and build great fortunes over and over again. Yes, it is about your finances as much as having a great family. You see I grew up on a farm, but one day, as a young man in my late teens and living through one of the worst periods of my life, I stumbled across four of the wealthiest men I had ever known. As fate would have it, they became my mentors. But truth be told, it was they who maneuvered me into their world of high flyers and jet-setters. I had to learn the hard way. It was certainly no free ride.
If one of your goals is to have one million dollars of net worth by retirement one option is to put $300 a month into your 401k plan and choose S&P 500 stock market index fund. If you're 35 years old now and plan to retire at age of 65, you'll gave exactly one million dollars 30 years from now assuming the SP index repeat itself in performance at the rate of 10% return.
Starting, or owning a business is another common wealth-building strategy. Starting a business doesn't always make you really wealthy right away. It takes time and energy to build the income of a business and its capital value, but it can make you wealthy over time if managed effectively. Therefore, if you have previous experience of running a business it can sometime makes more sense to buy an existing business and simply run it better. Want to know how to build wealth starting or owning a business? Find something that you love to do and that solves the needs of a target market. Then sell that product or service through relentless marketing and sales. Create efficient systems to sell more, more often. And work towards growing the value of your business by making it less dependent on you so that you can eventually sell it to a new owner. Bill Gates is a great example of someone who created serious wealth by starting a business.
My early mentors then were in my life situation, my maternal grandmother who was essentially my mother and my paternal grandfather who played the role of father to me. Grandmother taught me to give aid to people to help them get on their feet. She would never allow a child to go hungry; even the lost children that lived on the streets in the days of my childhood. Grandfather taught me the importance of building the family. The family is a great part of your wealth building foundation. He made sure I was introduced to the skills of working well in any situation. He gave me the knowledge of the ancient world; the old texts and philosophies of building wealth. Are these people my only mentors? Let me explain. They were the most impacting in my life because they were the ones that guided me in my formative years; first as I grew up and then as I was a total neophyte of international business. Together, they formed my foundations to greater things in life.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Choosing The Right Edmonton Bookkeeping Software You have full permission to reprint this article provided this box is kept unchanged.
No comments:
Post a Comment