‘The biggest takeaway is just discipline.’ What it takes to build wealth, according to top financial advisors – CNBC
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When it comes to financial uncertainties, the list of current possibilities may seem endless.
From high inflation to a possible looming recession and geopolitical turmoil, there are plenty of curve balls that may shift the U.S. economy and financial markets.
But for individual investors who employ some tried-and-true money strategies, getting wealthy and staying that way is well within their reach, according to financial experts who landed on CNBC’s Financial Advisor 100 list for 2022.
“The biggest takeaway is just discipline,” said Kaleialoha “Kalei” Cadinha-Pua’a, president and CEO of Cadinha & Co., a Honolulu, Hawaii-based registered investment advisor that ranked No. 16 on this year’s FA 100 list.
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“You see subtle changes that people can make in either retaining or accumulating wealth, and it’s changing just a little discipline,” she said.
Over time, living a humble lifestyle can help build sizable assets, in what Mike Conner, a chartered financial analyst and managing partner at Berwyn, Pennsylvania-based Kistler-Tiffany Advisors (No. 14 on the FA 100 list) calls the “neighbor next door philosophy.” That diligence, combined with taking risks by being entrepreneurial, has the power to catapult people to high levels of wealth.
“You go in a nondescript house and they’re worth $15 million and you would never know,” Conner said.
‘Sooner is better’ with investing
When it comes to investing, the best way to set yourself up to achieve your goals is to start as soon as possible.
That’s due to the power of compounding, where the earnings on the money you invest are reinvested and generate additional earnings.
“It’s super critical to start early,” said Kenneth Ligon, vice president and portfolio manager at Professional Advisory Services, a Vero Beach, Florida, investment management company that is No. 15 on the 2022 FA 100 list.
Take two investors, one who starts investing in their early 20s and the other who doesn’t start until 30, Ligon said. Even if the first investor stops investing when they reach 30, they will still stay ahead of the other investor who starts later, due to the power of compounding with an estimated 7% to 8% annual return.
That said, even getting started in your 30s isn’t bad. “Just, sooner is better,” Ligon said.
Importantly, the power of compounding also applies to debt, Cadinha-Pua’a noted.
That’s especially important to pay attention to now, as Federal Reserve rate hikes will make the interest on those debt balances more expensive than it has been in years, …….