5 strategies for building wealth on your own terms

It’s easy to give in to the idea that your financial future is largely outside of your own control. Sure, you can save, but you can’t control the stock market, anticipate future career changes, family events, or fluctuations in the economy at large. This mindset of surrendering to outside forces is quite possibly the biggest obstacle to building personal wealth.

You have a lot more control than you may think, and a deliberate approach to wealth management can set you up for long-term success — even in an uncertain world.

5 effective strategies for building wealth…that you can control

1. Prepare for a rewarding retirement early (with tax-advantaged investment vehicles).

Investing in yourself is priority number one. Regardless of your level of personal wealth, you’ll want the means to sustain a fulfilling lifestyle after you’re finished with your career. The sooner you engage in retirement planning and learn the intricacies of 401(k) retirement accounts offered by your employer, Roth IRAs (individual retirement accounts) that allow for tax-free withdrawals, and other retirement savings options, the better. 

These accounts are designed to grow exponentially over time, so a regular cadence of modest investments now can become a sizable source of wealth that will sustain your retirement for years. The contribution limits per year, and per age group, are often redefined, so you’ll want to stay on top of developments and maximize your potential savings.

2. Make smart investments that allow you to balance risks with potential returns.

We tend to think of money in one direction; you work for your money. Investing is all about turning the tables and making sure your money is working for you. Building wealth is difficult if you’re the only one putting in the work. Get those dollars going with smart investments that continue to make you money with the money you already have.

There are many potential investment options to consider. As a general rule, the safer the investment, the lower its potential return. However, too many risky investments may ultimately undermine your other strategies for building wealth. The appropriate balance will depend in part on your age, in part on your goals, and in part on personal tolerance for risk. 

You’ll want to spend some time learning about the various types of investments that are available to you, such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), and real estate investment trusts (REITs). Each 

3. Always control several types of assets.

The more you’re able to diversify the types of assets you control, the more you’re insulated from risks and unpredictable market fluctuations. Assets can be things like property, material goods, businesses, stock, or a stake in a real estate fund or hedge fund. 

If a large portion of your wealth is sitting in a single asset (say, a single-family home), and the real estate market in that area experiences a downturn, your overall wealth will be heavily impacted. Spreading that value out over multiple assets (as in a real estate fund), makes sure that when some markets are declining, others are increasing and your wealth does not swing so wildly. This is critical to the sustainable, long-term growth of your wealth. 

4. Consider developing multiple income streams.

Self-made millionaire Grant Cardone has said that “You won’t get rich without multiple flows of income.” There may be ways to add income to the job that you already have with a supplementary or symbiotic income stream. Grant uses the example of the person who does his video advertisements as someone who augmented existing streams: “After proving himself, he started making advertisements for those connected to me. He didn’t start a doughnut shop.”

You could also consider the possibility of starting a “side hustle” that turns hobbies you enjoy into additional income streams outside of your “day job.” This interesting Forbes article suggests seeking out income streams with “infinite returns,” meaning they return your principal investment and continue to produce cash flow infinitely after that. 

Becoming a landlord and renting out or leasing property you own but do not plan to use is a strong example. Once you’ve regained your initial investment, something like a rental property or a storage unit can continue to generate income and allow you to re-invest the same up-front money again on other, new income streams. Over time, this expands your portfolio and your wealth.

5. Take your financial literacy seriously — and take a wealth building course.

You don’t know what you don’t know. The best way to control your own financial destiny is to master the knowledge and skills you’ll need to make informed decisions. A proven wealth-building course from the Financial Educators’ Network can help you understand the steps to building wealth and all of your options. Just a single, brief course can give you tools and resources you’ll be able to refer back to indefinitely as you build your wealth on your own terms. Explore our program today and find a local course that can get you started on the right foot.