How to build wealth in 2021
Looking to build wealth in 2021? Let this latest article guide you through a few steps I feel can help you reach your wealth goals for 2021!
There are three ways to get financial security and keep financial security. One way is through inheritance. We’ll save that discussion for another time because it doesn’t require any effort to get rich by being bred into the right family. This article is going to focus on the building of wealth, which requires, time, effort, and a bit of money to get started.
The world is evolving into a global economy. As such, the rules that govern how we build wealth are constantly changing. Even if we are talking about how to build wealth in 2021, it is very likely we will have to revisit this discussion two or three years from now. However, now is the time for you to start focusing on building your wealth for the future.
Discussions about wealth creation for the future should focus on helping individuals to build the kind of wealth they need to have the lifestyle they want now. These discussions should also focus on helping individuals create wealth for retirement. That’s extremely important because most people don’t want a lesser lifestyle in retirement than they had during their working years.
The following information on how to build wealth in 2021 relates to the things you should start doing now.
Living Within Your Means
When people graduate from college and land that first decent paying job, it’s usually their first venture into financial independence. Without the proper training and guidance, a lot of these people start living a little beyond their means. It’s a common mistake that interferes with the ability to start wealth-building for the future.
You have to resist the temptation to live beyond your means. If you want a definition of “means”, use the following guideline. Living within your means should include living in a manner where you have all of what you need, some of what you want, and a goal to save at least 25% of your monthly income.
By using this guideline, you always have permission to adjust your standard of living upwards when your income rises. Conversely, it’s easier to adjust your standard of living downwards should your income suddenly drop. As long as you are always saving 25% of your income, you’ll have money to invest for the future and resources to manage emergencies, which will bite you when you least expect it.
Earn as Much as You Can as Early as You Can
In your 20s, your energy to devote towards earning money will be at its peak. That energy level will likely remain as you move into your 30s and maybe even early 40s. This is the time in your life for creating capital. Capital is the resource you will need if you are truly committed to creating wealth. Yes, that means working extra jobs if the opportunity arises.
If you have the entrepreneurial bug, the time to take risks and start your own business is when your energy is at its peak. Why? It takes hard work and long hours to build a successful business. As your family grows and your body ages, you’ll find it increasingly difficult to come up with the time and energy you need to devote to your business venture. Strike while the iron is hot and the body can withstand the strain.
Making the Right Investments
As you build those aforementioned capital resources, you need to put your capital to work making you additional money. With discipline and the right investments, you would be amazed at how fast your money will grow,
In your early years as an investor, you would do right for yourself to hire a professional financial advisor. The value they would bring to your wealth creation endeavor would likely prove to be invaluable. That goes beyond them helping you to invest your money wisely.
A good financial advisor is also a teacher. If you pay attention and ask questions, you can learn to make sound investment decisions on your own. If that’s something you might enjoy and can become proficient at, the day might come when you can effectively manage your own investment portfolio. It won’t hurt the advisor’s feeling (maybe wallet a little) because they will have added real value to your wealth management efforts.
Adjust to the Times
As we stated in the introduction, the world economy is evolving. The best way to create more wealth in a changing environment is to maintain some liquidity and stay flexible with your approach to saving and investing. If a new investment opportunity comes up, don’t jump right in but don’t dismiss these options right away. If your investment approach is flexible, you’ll have time to assess the potential of a new investment opportunity and the capital to get in when the time is right.
In summary, the keys to creating wealth in 2021 are: live within your means, earn and save as fast as you can as early as you, seek sound investment advice until you have the expertise, and stay flexible. If you have the discipline to do these four things, you CAN create the kind of wealth you want and deserve.
Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada.
This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see a professional advisor for individual financial advice based on your personal circumstances.
The views and opinions expressed herein are those of the author and do not necessarily represent the views or opinions of Assante Capital Management Ltd. and its affiliated companies.