The 5 Wealth Building Cornerstones To Help You Reach Your Financial Goals

The 5 Wealth Building Cornerstones To Help You Reach Your Financial Goals

INRODUCTION

Since the beginning of time, mankind has been in pursuit of wealth. As with all things worth achieving, there is no simple road map to success. Wealth building, in particular, is a complex undertaking. There are barriers to entry and things that stand between you and your financial freedom.

In the quest for success, there are five wealth building cornerstones to obtaining your financial goals. These building blocks are the fundamental pillars that anyone seeking to build a solid foundation for growing their wealth must have in place.

Here are 5 main cornerstones to help you reach your financial goals.

Cornerstone #1: Gain Financial Knowledge

Much of what is seen as a financial success is based on being familiar with the vast information-filled world of personal finance.

In order to reach your financial goals, you must become your own financial mentor. You have to develop a deep understanding of what is going on with the economy, taxes, and investments. You must be savvy when it comes to your finances.

Anyone that has gotten even a little bit of financial education has already reduced their chances of financial failure. You will have a better understanding of what you should do, and how to do it, in order to grow your wealth.

I would recommend spending some time learning about your budget, and what it is supposed to do for you.

Cornerstone #2: Earn More

It’s hard enough to save money in the first place, but the most difficult thing to do is maintain those savings. If you can save more, there is a greater chance that your money will grow over time. That’s why it’s the second pillar of the wealth building roadmap. The goal is to save money at least 10% of your income.

But in order to save 10% of your income, you need to earn a significant amount. Remember, this is more than just pocket change. It’s actually significantly more than you would make working full-time at a job. It’s enough to support a lifestyle that includes things like travel, house maintenance, and vacation travel.

If you earn $20,000 a year, you need to make at least $14,000 to meet the 10% benchmark.

Cornerstone #3: Save More

According to a recent study by GOBankingRates, it is estimated that 54.6% of all Americans do not have enough money to cover a $400 emergency expense. If your monthly expenses exceed your income by that amount, you are in a financial hole that is just waiting to be dug.

It’s true that the cost of living has risen and so has inflation. But the more troubling statistic is that the average American household has been spending roughly 10% more than their income for the past six years. So how can anyone have enough to cover emergency expenses if they’re spending more money than they make?

The obvious answer is to save more money and to start sooner rather than later. Save something that’s at least 10% of your monthly income so that you have a safety net.

Cornerstone #4: Spend Less

Ever heard the old adage, “You can only eat the dessert. You can not eat the steak and leave the potatoes”? This is the essence of focusing on your “financial sweet spot” – spending less than you earn.

No matter how much you earn, your expenses (mainly housing, food, and utilities) determine the amount of income that you have available to invest in the financial markets. This is called your “savings” threshold. The higher your savings threshold, the more you can invest and grow your wealth.

The idea is that when you bring your spending under your savings threshold, you can then spend more (if you wish) and increase your financial wealth.

Cornerstone #5: Invest Wisely

If you’re looking to grow your wealth, investing in anything not backed by long-term, lock-in asset is a risky move. You can take a little bit of risk with your investments but you cannot take a huge gamble with your life savings. For this reason, you must invest in the stock market and not in CDs or bonds. In the market, anything can happen but you can’t lose everything if you’re investing in stocks.

You can invest in the stock market through individual stocks, index funds, mutual funds, or ETFs. The stock market isn’t perfect but it’s where most successful individuals and businesses got their start. The fact that it is so prevalent in our world makes it an appealing asset class for those looking to grow their wealth.

Conclusion

Understanding the key fundamentals that go into wealth building is the first step in making your journey into wealth creation a profitable one. You will be able to see things in new ways, and the end result will be the fulfillment of a lifetime of dreams.

Here’s to your financial future!

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