4 Key Secrets to Building Wealth Without Losing Sight of Your Priorities
It blows me away how most people still aren’t aware of the incredible resources that exist to help the average person build wealth nowadays.
On the flip side, most of us have heard of some useful financial advice, and yet, just never put it into action (if that’s you, Warren Buffett’s frowning at you somewhere, I’m sure).
In my experience, most people believe wealth-building strategies either won’t get them anywhere because they don’t have enough to invest, or that they simply don’t work. But that couldn’t be further from the case.
Sure, you need money to make money. And, yes, the more money you have, the more money you can make. But you can do a lot with what you have over the long run, no matter how much that is.
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
– Warren Buffett
If your priority is what really matters– that is, family, friends, your calling, and giving back to those in need (as it should be for all of us)– there are a few strategies and resources you can take advantage of to still build wealth without losing sight of what is most important.
1. Use a robo-investor
No, robocop did not retire from service to go into investing (but it might be a distant cousin, we have yet to confirm).
Robo-investing, via companies such as Betterment and Wealthfront, offers a very low-cost option when compared to hiring an investment manager. Typically, robo-investors have no minimum, so you can start with the couple bucks you have in your back pocket.
When you sign up, these services take some basic information and create an optimized portfolio for you based on various factors such as 80+ years of economic history and various trends.
There’s argument as to whether it’s best to invest in a robo-advisor or just into a straight S&P 500 index fund, however, both will offer you comparable returns with no regular work from you.
Just set up a weekly withdrawal (even a few dollars from your weekly check can get you started on the habit) and everything runs automatically.
2. Automate your finances
Before you can effectively build wealth, you really need to get great at managing your finances so you can maximize what you’re bringing in. And there’s so much you can do to simplify the handling of your finances that people either never think of or just don’t do the work to implement.
Set up all your bills on auto bill-pay, even going so far as rearranging your due dates (a simple phone call to your car financing company, etc. can do it) so that everything is due on the same date each month, allowing you to control spending and see everything clearly without any additional work on your end.
You can also use a service such as Mint to set up a budget and track it easily in a few minutes each week. It’s a simple step, but it makes a huge difference in helping reduce overspending, noticing problem areas, and helping you save the most money.
3. Use Acorns to invest your spare change
Another little secret is Acorns, which allows you to invest your spare change automatically. After each purchase, Acorns will round up the amount to the nearest dollar and invest the difference for you.
It might not sound like much, but with daily charges adding up– 10 cents here, 50 cents there, 80 cents other times, over the course of an entire month — you can see how quickly this can add up without you ever noticing it.
4. Invest your tax refund
Many of us look forward to a nice tax refund at the beginning of the New Year. However, most of us also spend it in the blink of an eye.
Instead, make it an annual tradition to invest that chunk of change into something new each year.
Your index fund, some stock, a business, or something else which you believe will allow you to build wealth. Imagine how much that will add up to over the next 20 years.