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There’s no shortage of get-rich-quick schemes, from the latest crypto memecoin to flipping penny stocks. Don’t be fooled by their promises of easy wealth—schemes hide giant risks and the vast majority of investors end up losing money.
Instead, spend your time learning how to build wealth, which requires you to make an investing plan and adopt a long-term mindset. Follow these eight simple steps to get started building sustainable wealth.
1. Start by Making a Plan
Building wealth starts with making a financial plan. That means taking the time to identify your goals and game out how you can accomplish them.
“Building wealth begins with a vision and a plan,” says Peter Cassciotta, owner of Asset Management and Advisory Services of Lee County.
Hiring a financial advisor is a great way to begin making your plan for building wealth. It’s a more expensive option, particularly for those who are just starting out, but choosing an advisor who’s a certified financial planner (CFP) means you’re paying for planning experience.
Shopping around for a robo-advisor that also offers access to financial advisors may be a more affordable option. Check out robos like Betterment or Ellevest, both of which provide managed investment portfolios plus the chance to talk with advisors.
2. Make a Budget and Stick to It
Plenty of people dread the “b” word, but budgeting is a key plank in your wealth building strategy. Building a budget and sticking to it helps increase your chances of carrying out your plan and achieving your financial goals.
Budgets also help you understand where your money goes each month and prevent behaviors that can endanger your goals, like overspending.
3. Build Your Emergency Fund
When the furnace goes out or the refrigerator quits working, where does the money come from if you don’t have emergency savings? Lori Gross, financial and investment advisor at Outlook Financial Center says credit cards bear the brunt and cause you to incur extra costs and fees, like sky-high interest rates.
By building an emergency fund, you can protect your credit as well as reap the benefits of earning interest on an online savings account—all the while enjoying the peace of mind of knowing you have money in the bank to cover life’s surprises.
4. Automate Your Financial Life
By making saving, investing and bill pay automatic, you all but eliminate the chance you forget to set aside money for your goals or make progress on paying off your debts.</…….