Welcome to Personal Finance Insider, a biweekly newsletter that connects you with the stories, strategies, and tips you need to be better with money.
Here’s what: I discovered the secret to building wealth
I don’t know about you, but I suffer from information overload. It can be tough deciphering what’s worth reading, watching, and listening to and what’s not.
This is especially true when it comes to money advice, where the stakes are high. How can you know what really works? To my surprise, the secret to building wealth was way easier to identify than I expected.
Around year two of working as a personal-finance reporter, I started noticing distinct patterns in the fundamental strategy that experts and high achievers — like millionaires and early retirees — were sharing.
Despite all the different ways of describing how they reached or helped clients reach an impressive milestone, the core advice could be summed up in a single sentence:
Spend less than you earn and save or invest the rest.
If you haven’t mastered the first part of this equation (living below your means) seek guidance on budgeting and debt payoff. When you’re ready to invest, getting help from a financial advisor could be hugely beneficial.
Of course, there’s more to know about building long-term wealth; this isn’t all the advice you’ll ever need. Consuming a lot of information can be useful sometimes, like when you’re searching for the right loan or bank account. Increasing your income and protecting your assets with insurance can prove crucial. And there are myriad strategies for keeping your spending in check and leveraging debt.
But generally, when the goal is to be better off financially than you were yesterday, the effectiveness of that string of 11 words is unshakable. For me, it’s the North Star.
—Tanza Loudenback, Personal Finance Insider correspondent and certified financial planner
Want advice about a personal money situation? Submit your story here for a chance to be featured in my biweekly column, Ask a Financial Planner.
Ad: This startup wants to help you plan for an easy retirement
After seeing too many people miss opportunities to maximize their retirement income, SmartAsset developed a free tool that helps you find unbiased, expert advice. If you’re ready to make smarter decisions around investing your 401(k), optimizing your savings, and minimizing taxes, SmartAsset’s tool can help you accomplish your …….