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Regardless of how much money one has, it seems that everyone wants even greater wealth. One way to accomplish this is through the growth of assets. The real challenge to building wealth has little to do with understanding principles, but rather lies with a long-term and consistent application of those principles. This is the reason so few people are able to build significant wealth. Knowledge that is not applied consistently has no practical value.
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"Let individuals create real wealth, empower them, create something that they can leave for their children." - John Sununu Strategiesto GrowYour Assets Investment
3 Principles For Wise Investment • Three key things determine the success of any asset growth strategy:
Questions for you: • Are you investing all you can? • Can you deal with the risk that comes with higher returns? • Are you willing to educate yourself to the necessary level to earn higher returns?
“Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful.”” - Warren Buffett
9 Steps for Success Growing Assets:
Step #1:Have a Goal And a Plan • Have a written plan. Without goals and a plan to support them, success will be very challenging to achieve. • Studies have shown that goal setting and planning are incredibly effective and go a long way towards guaranteeing positive results. • The best plan for you will vary based on your current assets and income, as well as your current stage of life.
Step #2:Live Within Your Means • The freedom of being wealthy needs to be more important to you than having the appearance of wealth. • Every dollar that passes through our hands really only has one of two outcomes: it is either used to increase wealth or it is not. • Following a budget helps you allocate more of your dollars toward building your assets.
Step #3:Increase Your Financial Knowledge • The best way to achieve growth of assets is to educate yourself. • Learn how to maximally profit in any market condition. This takes effort and time, but it’s well worth it. • Increasing financial knowledge is a critical step to your financial future. There is no shortage of books, websites, courses, and newsletters to provide the necessary education.
Step #4:Start Early • At a 12% growth rate: • Procrastination has a hugely detrimental effect when it comes to financial matters!
Step #4:Start Early (Cont’d.) • The longer you wait, the more difficult the process becomes. • See how much each age group has to save to achieve significant assets:
Step #5:Save and Invest on Auto-Pilot • Most things are easier when done automatically. • Set up automatic paycheck deductions into savings and investment accounts. • Invest in vehicles that automatically grow your assets. "Owning a home is a keystone of wealth...both financial affluence and emotional security." - Suze Orman
Step #6:Learn From Your Results • You have the power to create your financial future: • Take action. • Evaluate your results. • Then improve your actions until your goal is achieved. • Asset accumulation must become a set of habits that you create for yourself.
Step #7:Over-Commit Resources • The military has a principal called 'overwhelming force'. • In a nutshell, this is the idea of committing resources well beyond what is needed. • For example, if a particular mission needed a minimum of 1000 troops, four tanks, and three planes to be successful, the military might send 1500 troops, six tanks, and five planes.
Step #8:Keep Your Assets Out of Reach • It is much easier to save money in the long term if it is kept in a place that is difficult to reach. • For example, with a brokerage account, most of us would not sell stock for a little weekend fun. Similarly, money that is saved in a retirement account incurs financial penalties associated with accessing the money.
Step #8:Keep Your Assets Out of Reach • The best policy is to never borrow from your long-term savings to fund your current lifestyle. • The more you're willing to sacrifice now, the more you're likely to have in the future.
Step #9:Manage Your Risk • It’s important to guard your assets while still providing the opportunity for significant growth. • Always consider the downside to any financial moves or investments.
Step #9:Manage Your Risk • Insurance prevents you from depleting your assets in a crisis: health insurance, automobile insurance, long-term care insurance, and more can protect your assets.
Investing in the Stock Market Growing Assets:
Getting Started With theStock Market • The stock market typically pays long-term returns of 11%. It’s a venue that you’ll likely want to use in growing your assets. • The most common stock market investments :
Stock Analysis:Understand the basic financials • These numbers can help you determine if a stock is priced fairly. They also give some indication regarding the health of the company.
Stock Analysis:What is the potential for growth? • Is the industry stagnant or does it show a lot of potential for growth in the future? • How has that field changed over the last few years? • What is the expectation for the future?
Stock Analysis:Income • Does the company pay any dividends?If so, how much does it pay? • Many times, the more income an investment provides, the less likely it is to experience significant growth in the future. • This is because the profits are being spent on the investors instead of expanding the business.
“Wealth is not without its advantages and the case to the contrary, although it has often been made, has never proved widely persuasive.” - John Kenneth Galbraith
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