3 Steps to Building Wealth
The 3 Steps to Building Wealth
For many Americans building true wealth might seem beyond reach. Wealth creation, if grounded in sound principles and practices, is possible for most people. The key to building wealth is to be disciplined, patient and willing to learn and understand the process.
1. Clearly Define Your Wealth Ambition
Wealth building begins with a clear vision of what you want your future to look like. You can begin to work toward those goals by developing a plan and creating strategies to help you build, enhance and preserve your wealth for the rest of your life.
The amount of wealth you build is not just a function of how much you can save and invest; it’s also a function of being aware of how much you spend. Living within your means can result in a higher savings rate.
2. Building Wealth
Wealth is built over time by utilizing a disciplined savings and spending approach. Mill City Investment Services can help you do this through long-term investment strategies, and can help you work towards building your wealth.’
3. Develop and Stick with a Long-Term Investment Strategy
In a 10-year study conducted by _DALBAR_*, one of the nation’s leading financial services market research firm, it was found that investors, through their own behavior, consistently failed to capture as much as 60 percent of the returns generated by the stock market. That is, by making bad decisions based on emotion or ‘hot tips’ an investor’s behavior negatively impacted their investment performance.
Studies have clearly shown that investors who adhere to a long-term investment strategy based on well-defined objectives typically outperform investors who do not. Discipline and faith in the markets are needed to potentially be a successful investor.
Diversification cannot eliminate the risk of fluctuating prices and uncertain returns. Dollar Cost Averaging does not assure a profit and does not protect against loss in a declining market. Such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue their purchases through periods of falling prices, when the value of their investments may be declining.
*Source: “Quantitative Analysis of Investor Behavior, 2016,” DALBAR, Inc.
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