Want to Build Wealth? Here’s How to Get Started – CEOWORLD magazine

Millennials have been struggling to generate wealth when compared to previous generations, with the average Baby Boomer holding up to 7x the wealth of Millennials at the same age.

Add in the pandemic, and financial futures of “the unluckiest generation in U.S. history” are grim. According to a recent survey from Deloitte, two-thirds of Millennials “often worry or get stressed” about their financial situations, and only 36% of Millennials believe their financial situations will improve by 2022.

So how can Millennials accumulate wealth when the odds are stacked against them? While it may not be easy, the formula for building wealth is simpler than most people think and it starts with being informed.

The only way to build substantial wealth is to invest in financial assets — not by saving money.

Let’s look at an example. If you earn $100,000 a year, you will take home approximately $70,000 a year after taxes. Assuming you’re renting a reasonable apartment in a major city, you’re looking at spending at least $25,000 a year on rent — plus the $20,000 average cost of bills, utilities, loan repayments, etc.

Assuming you only spend a meager $600 per month on food, or $7,200 yearly, that leaves you with $17,800. If you factor in transportation, healthcare, and personal care you’re likely to have only about $10,000 to save per year. Repeat that year after year, and it will take you 100 years to save $1 million.

Plus, you have to actually have a six-figure salary to support this trajectory, which is a big jump from the $31,000 median income in the United States. This means it’s simply not possible for the average American to build real wealth through savings alone, at least not in their lifetimes.

Charlotte DeMocker, co-founder and Chief Operating Officer at Penny

So, what assets should you invest in?

Firstly, you should reframe how you think about money. Money is a tool, and yours should be working for you to generate more. When you think about investing your money, whatever asset you’re considering should be a money making asset rather than a depreciating asset. For example: a new car is a depreciating asset, while a real estate investment that you turn into a rental property is a money generating asset.

There are a variety of assets to choose from when considering how to invest your resources. Before you start getting sophisticated with your investments, it’s best to have your basics covered. Make sure you have a handle on your 401k, if you work for a company that offers one, and consider opening a retirement account in the form of a Roth IRA or Traditional IRA. Within these accounts …….

Source: https://ceoworld.biz/2021/08/05/want-to-build-wealth-heres-how-to-get-started/