Having spent nearly three decades in the financial services industry, I’ve come across many pieces of sound financial advice. You’ve probably heard some of them as well, such as the importance of living within your means, investing early, or following a budget.
You would do well to follow any of those lessons, but I want to focus on three pieces of advice I now know that I wish I’d known when I was younger. I like to call these my three rules for building wealth.
Having Discipline To Invest Consistently Helps To Build Wealth
When it comes to investing, what matters most is not market performance or this year’s hot stock picks; it’s applying the right behaviors to a personalized strategy based on your specific goals and needs. One of those behaviors is being disciplined in your investing, rather than acting on emotion.
The markets fluctuate every day. You’ll only feel increasingly stressed and prone to making emotional decisions if you monitor your performance and adjust your investments every time something unexpected happens. It’s more important to maintain a long-term view and stick to a disciplined approach of investing consistently and avoid making decisions based on what the media is feeding you.
Having Patience To Invest Regularly Helps To Build Wealth
Long-term investing requires patience. Depending on your investing strategies, you may not see a significant difference in your portfolio for years. Rather than get frustrated and take more risks, it’s important to have patience and continue with your plan in mind.
I call this the tortoise and the hare predicament: fast investments don’t mean you’ll reach the finish line first. Too often, people in their 20s and 30s try to keep close to 100% of their portfolio in stocks. The theory is that young investors have decades to ride out volatility and make up for any lost returns. While this may work for some individuals, for many it’s too risky and isn’t always the best decision for the long-term.
Investing entirely in stocks isn’t necessarily the way to go, even if it makes sense on paper. Too often, I’ve seen investors give up when their portfolio takes a big hit. They lose motivation to keep investing, and they struggle to keep their eyes on the finish line of their long-term goals.
Incorporating investments that offer lower returns and lower risk may help you feel more confident in your portfolio and avoid the rollercoaster of emotions if your portfolio takes a hit during a downturn.
Educating Yourself Helps To Build Wealth
Investing for wealth starts with investing in yourself. The more you understand your investments options and how they play into your financial picture, the more confident you can feel and the more informed decisions you can make.
Searching online for personalized guidance can be a gamble, so it’s important to work with a professional who can steer you in the right direction. An experienced financial advisor can offer you advice and recommendations based on your specific situation—not generalized theories or rules of thumb.
As an independent financial advisor, my mission is to make a meaningful impact on the lives of my clients. I aim to help individuals, professionals, and business owners make informed decisions with their money and pursue a strong financial future. If you’re interested in learning more about my rules for building wealth, I encourage you to reach out to me. Call (800) 480-8972 or email info@garlandandassoc.com.
About Terry
Terry Garland is the founder and CEO of Garland & Associates with more than 25 years of industry experience. He works with individuals, small-to-medium sized businesses, and medical professionals, including physicians and dentists, allowing them access to a wide variety of specialized services and investment vehicles to fit their specific needs. A graduate of Drake University and the Wharton School at the University of Pennsylvania, he is a certified wealth strategist and a registered principal. With offices in Des Moines, Iowa and Carlsbad, California, he serves clients across the country. Learn more by connecting with him on LinkedIn.