Sure it’s possible to make a boat-load of fast cash. But even the overnight millionaires- if they’re smart – follow tried, true and yes, conservative strategies if they want to build a financial empire that lasts.
Here’s 5 of the top tips on wealth creation to help you make sense of the big picture of financial success.
1. You’re not dead yet
So why should you make short-term, big gains that are here today, but might be gone tomorrow? The smartest money strategists use a portion of their income to invest, and they invest long-term. High-risk ventured can be winning deals – but not with all of your bucks. If you want to take a chance, play the high-stakes games with 20% or less of your total liquid assets.
2. One basket is a bad plan
AKA: ‘Diversify’. Statistically speaking, a solid diversification of your money means it should be spread among about 20-25 different stocks or ‘vehicles’ of investment. Investing both globally and locally (as in: USA) is also good strategy for stocks.
3. Patience is a virtue
And that includes the subject of investing. Fad chasing doesn’t work with fashion and it won’t work with your hard-earned cash. Instead of working to chase the latest, let your bucks give you more bang by choosing investments that perform well over the long haul. If you’re still not clear on this, revisit point #1, above.
4. A penny saved …
Or ‘pennies’ in this day and age. Fiscal smart guys (and gals) put away 10% of every paycheck and stash it in a savings account. And when that little nest egg gets big enough to crack, they move it into their investment account. They act as if the money was never in their check in the first place. And if you want your money to multiply, you should, too.
5. Reinvest, reinvest, reinvest
I know you want that nice new car, a fresh face to your home’s interior, a trip to the Bahamas, but if you’ve read this far, then you probably want wealth even more. Just look at it this way: once the money is in investments, the magic begins – it’s called ‘compound interest’. If you reinvest your interest, that little ant hill of earnings you’ve got today will look more like a mountain peak a few years from now.
Are you following a plan for lasting cash? Are you sticking with it? Share your top tip on wealth creation in the comments below.