We’ve talked a bit about how to become wealthy and hopefully shared some new ideas that you’re already putting into place to give you and your family long term wealth potential. Here are 4 more tips to ensure you’re on the right path and not doing something that will hurt you in the long run.

Wealth Building Strategy Tips

Investments that seem good but really aren’t

Are you a “wing it” kind of person? This might work in other areas of your life, but when it comes to wealth building, this isn’t usually the best option (especially if it causes you to lose 10 years of progress). Have a strategy with long term and short term goals, and avoid going out one day and buying some gold because the guy on TV said you need to if you don’t want to miss out on the opportunity of a lifetime.

Pro tip: if the guy on national TV is telling you to invest in something (eg. gold, real estate, a “hot” stock), chances are it’s way too late. All the smart investors bought theirs a long time ago, and now everyone watching TV and listening to the news is going to buy whatever it is, increasing the price for those smart investors who will immediately sell after the price increases, leaving you with a loss.

Your friend’s suggestion became your way of life

wealth building tips with D&M AccountingUnless your friend is a millionaire, it might not always be a good idea to follow the investments they choose. What works for them may not work for you. You must invest based on what you like, what you know a lot about, your goals and particular financial position.

Avoid extremes

Moving too fast (or too slow) will not serve you well in the long run. It’s hard to choose the slower investments in today’s fast paced world, because most of us want instant gratification, an instant 20% return on our money. This is possible, but the faster and better the return, the more risky it likely is. Plan for the long term. Adjust your risk tolerance based on your own stress limits and age.

Don’t DIY

Some things are great to just “do it yourself”. You get to learn something new, potentially save money on hiring a professional, etc. However, this way isn’t always a money saver, and almost never a time saver. Financial freedom isn’t a clear straight path, and having the right team around helping you along the way gives you peace of mind and can save you thousands of dollars.

Follow these tips, along with the ones presented in previous blogs, and you’re on your way to financial freedom!

Contact D&M Accounting and we’ll answer any questions you have about your personal or business wealth and tax strategies.

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