(Newswire.net — October 13, 2017) Syosset, New York —
Unless one wins the lottery, wealth is not likely to “just happen.” It has be has to be earned and built over time – carefully, strategically, and with deliberate purpose.
According to a Stanford University study, the average American household wealth doubled between 1983 and 2010, but that picture is chanigng. Gen X and Gen Y have accumulated less wealth than their parents. Their average wealth in 2010 was 7% below that of those in their 20s and 30s in 1983.
If building a healthy personal fortune is appealing to you, then here are some tips to help you on the wealth-building journey:
Focus on building slowly, not getting rich quick
Although some people may think of the wealthy as trust-fund babies raised with privileged backgrounds, almost 60% of the wealthy individuals surveyed in a recent study said they came from a middle-class background, and 19% grew up poor. When asked how their wealth was accumulated, respondents estimated that they acquired just 10% on average through inheritance, while 52% came from earned income and 32% from investments.
The lesson here is that for the most part, these wealthy individuals acquired the bulk of their fortune not from windfalls but the old-fashioned way — by working, saving, and investing over time, and in many cases, a long time.
There is no lottery ticket or get-rich-quick scheme for most of us. Slow and steady is the rule to wealth development. You may need to sacrifice a night on the town here and there, or frivolous and extravagant spending as you get there, but remember that some of the richest people in the world have accumulated wealth in this way.
“The successful warrior is the average man with laser-like focus.” –Bruce Lee
A middle ground approach could be your best bet. Fancy investments that boast huge returns in no time at all should be considered with a very healthy dose of skepticism. To their credit, the overwhelming majority of the rich don’t buy this. Just 14% said they made the bulk of their investment gains by timing the market; the other 86% credited their success to good old buy-and-hold investing, or investing in a diversified mix of stocks and bonds and participating in the long-term upward sweep of the market as opposed to the vain exercise of trying to predict its movements.
Start with the end
One person’s idea of wealth may vary wildly from the next person’s. Without a clearly stated end-goal, how is it possible to keep on track and make it there? It’s highly unlikely. Whether it’s retirement, buying your dream home, or whatever your personal goals are, always consider the consequences of your financial decisions, how they contribute to the big picture, and the prize at the end of the wealth-building road.
If you’re going to become wealthy, you need to monitor all parts of your wealth. Be frugal, but not foolish. Don’t spend an inordinate amount of time trying to save a penny when you could be focusing your energy on earning a dollar somewhere else. Your wisest way to build wealth initially would be investing those hours in understanding investing and increasing your own financial literacy.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. Member FINRA & SIPC
About David Lerner Associates
Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY.