From Hard Work to Smart Investing: The 5 Key Strategies to Build Wealth
A republished blog post from September 2012.
Here’s an article from the Wayback Machine. I wrote this initial blog back in September 2012! I’d say this has aged rather well. Keep learning and growing and knowing who you are. Investing is highly personal, and it requires you to know yourself, what is ok for you, and what is not ok for you.
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Today I found this Survey, $25 Million Plus Investors 2012, by Spectrum Groups. The site had some good insights that I would like to share, plus I added my two cents.
Source: https://spectrem.com/Content/25-Million-Plus-Create-Wealth.aspx. A relink as the original link no longer worked.
Here are their top five factors:
5) In the Right Place at the Right Time
Being in the right place at the right time. For large investors of $25M or more, being at the right place at the right time was more important to frugality. My two cents: Being at the right place happens probably more than you think. Are you reading up on what is going on in the world? Do you associate with similarly situated and minded folks as your aspiration and your interest? I do agree being frugal is important…no doubt. Living below your means is how you take some income and convert it into investments. This is how you create momentum, and with momentum comes the ability to seize an opportunity when the right one shows up.
4) Taking Risks
Ah…the difference between high net worth and ultra-high net worth is the latter ranks taking risks higher than those with investments less than $25M. Do you know your risk tolerance level? That is going to be important if you are going to leverage risk into your investment strategy.
3) Smart Investing
In a recent study by Spectrum Group, millionaires, regardless of level, agreed Smart Investing was the third most important factor. From my perspective, allocating your resources into asset classes and vehicles is such a critical decision that requires thorough analysis and consideration. If someone tells you it is a good thing and yet you know nothing about it….run away from yourself and your tendencies to give your money to someone else to invest. Knowledge is Power, and being knowledgeable about your money and investments is how you win.
2) Education
Higher Education and Advanced Education are important factors. I would add to this category that we should include daily reading materials on global/geopolitical, political, and economics in order to stay knowledgeable.
1) Hard Work
Millionaires, regardless of level, credit their wealth to hard work. I do think, also, the harder your work, the luckier you get, which loops from #1 to #5.
And for me, I have added an extra one…number zero, where it all begins.
0) All People can Make Money; it Takes a GENIUS to Keep It!
Be strategic about what you make, how you spend it, and what you invest in. Live below what you need, and be respectful of the economy, it can get shaky, and you have to be ready for what it will bring you.
As I read the last item, it was the early days of what I would later call Embrace Any Future. This concept is all about flexibility and freedom to embrace any future that comes your way. It took several years to formulate the words around it. Compounding works…not only with dollars but time and knowledge.
Next Steps:
What is one of the factors you already do today that you can double your efforts? Getting better at what you already do well can help you advance at greater speeds.
Share with others what you are really good at. They probably know someone else who could benefit from your expertise. With any extra income that arises, determine what investment is right for you.
Consider sharing this newsletter with a mentor, mentee, colleague, family or friend.