Wealth in Words

“Someone is sitting in the shade today because someone else planted a tree a long time ago.” – Warren Buffett When it comes to conquering the challenge of living financially free you must make saving a priority. In other words, it is essential that you create excess cash reserves to put toward paying down your debts and investing in your future. This can be accomplished through earning more income or, more immediately, by putting a plan in place to minimize expenses. Jim Rohn has a simple formula  for savings that can be used effectively to start growing your reserves. As a result, focusing on saving will train your mind to think about abundance. Focus on all the things you can do with what you have right now. Remember, the more you save the more you will be able to invest and, in turn, you will be able to exploit compounding of interest . Putting your money to work for you is a key element in your quest to acquiring wealth . “The rich invest their money and spend what...

We all know these people. They seem to have an endless amount of money as evident in the way they live, what they own, the places they go on a whim, and by the topics of their conversations. But what are some of the distinguishing characteristics between the truly wealthy and regular people? Moreover, how can regular folks like us who aspire to attain this level of financial freedom make these aspirations a reality? Below are a few key ingredients to understanding how to acquire a mindset for wealth accumulation. First, the wealthy are owners of their assets. From my work experience in wealth management, most high net worth (HNW) investors have acquired wealth through owning a family business. For those of us not born into a family with its own enterprise, you can still think like an owner at your place of employment. As you progress through the corporate ranks your compensation package will begin to include a number of additional income opportunities. For example, corporate e...

Dollar cost averaging is a simple, yet effective investment strategy. In effect, you as an investor contribute a set amount of money to an account to buy a fixed amount of an investment regardless of share price. For example, you can set aside $100 a month to invest into a particular product, thereby averaging out the cost per transaction given the fixed amount contributed over the lifetime of your investment. Using dollar cost averaging will allow for you to begin to accumulate wealth in the stock market just as setting aside a pre-determined amount each month for savings will create a financial safety cushion. Additionally, dollar cost averaging is an excellent way to eliminate trying to time the market, which in most cases can lead to paralysis by analysis. In other words, creating a systematic process for investing can help automate the saving process and focus your thoughts on long-term results. For those of you who are new to investing, dollar cost averaging is ...

For those unfamiliar, the late Jim Rohn was one of leading minds in the business coaching and personal development field. His work covers topics such as business strategy, time management, goal attainment, and personal finance. Rohn’s book “7 Strategies for Wealth and Happiness” contains a plethora of useful, applicable tactics that can dramatically improve your lifestyle through creating paradigm shifts in mindset and actions. He spends a portion of the book discussing an outline for managing a budget.  Specifically, Rohn calls it his 70/30 Rule. The premise is simple to follow and easy to implement. First, you start with your after-tax net earnings each month and multiply that value by 70%. Expenses for the month should not exceed this number (i.e. 70% of net wages). Second, subtract this expense target from after-tax monthly income and you will have 30% remaining. Lastly, this 30% is to be divided evenly into thirds. Rohn advises that the first third (10% of after-tax ...

The Robo-Advisor concept is relatively new to the mainstream investment crowd. The product is applicable across many demographics spanning different age, wealth, income, and financial goal categories. In essence, Robo-Advisors are to the advisory business what ETF’s are to the fund business.* In other words, the product is a disruption to the traditional asset management industry and is worthy of consideration for your investment plan. To begin, a Robo-Advisor is a passive investment management strategy that employs ETF’s to build a portfolio based on Modern Portfolio Theory (MPT). MPT originated from the research of Harry Markowitz. His paper’s premise suggest that investors can tailor a portfolio of investments based on their risk tolerance, therefore implying that assuming some risk is an inevitable part of investing. While risk is inevitable, that risk can be mitigated through diversifying one’s holdings in a portfolio. Markowitz’s work implies that building an efficient portf...