Believe it or not, building wealth for a secure, early retirement is actually very simple, in theory. The equation for financial success is a function of just three easy-to-understand principles:
- The amount of money you invest
- The growth rate of your money
- The amount of time it has to grow
Unfortunately, few people succeed in building wealth because it has little to do with understanding simple principles and everything to do with taking effective action. The challenge isn’t in knowledge, but in translating that knowledge into meaningful results. Here are some tips to help you build wealth for an earlier retirement.
1.) Have a Plan – Financial success is a choice. It results from the many small decisions you make each and every day. Without a plan and goals to achieve wealth, your life is like a sailboat without a rudder: it just spins in circles without definite direction.
2.) Lifestyle Lags Income – The problem is you will never become rich by spending money. You must control your spending so that your lifestyle lags behind your income. This will create available capital for your investment activities.
3.) Invest In Your Financial Education – You must learn before you can earn. This is critically important because financial intelligence cannot be developed overnight any more than wealth can be accumulated overnight. It takes time and disciplined effort.
4.) Don’t Procrastinate, Start Today! – The earlier you start, the easier the process is to swallow. Many people procrastinate because they feel uncomfortable and out of place making financial decisions. They feel ignorant or the subject seems dry and complicated with confusing technical jargon. Get over it! Nobody is born a financial genius. Everyone has to start somewhere. Just get started and fumble through it. Silly mistakes are better than doing nothing at all.
5.) Put Your Wealth Building on Auto-Pilot – Arrange your finances so that every month certain actions take place that automatically grow your assets without any decisions or extra effort on your part. This creates an enforced discipline to keep you on track.
6.) Take Responsibility For All Your Investment Results – Unless you are a trust fund baby or win the lottery, the way you will become wealthy is by owning full responsibility for every aspect of your wealth. This causes you to get into action and correct and adjust your plans until you reach your goal. You must build your wealth like an entrepreneur builds a business: “if it’s got to be, then it is up to me.”
Of course, this list is not comprehensive of everything you need to know to have financial success, it is a small step in the right direction to an early retirement. Need a helpful hand to plan out your first steps? Schedule an appointment with William Wolske today!