What is the Best Wealth Building Strategy?

Today’s question is a crucial one: what is the best strategy for building wealth? Spoiler alert: it’s not a typical get-rich-quick scheme. Nicholas J. Colantuono, CFP® joins the Money Wisdom Question Series to share what you may or may not want to hear.

The Simple Strategy

The best long-term wealth-building strategy is surprisingly simple: live within your means. This approach enables you to save and invest while avoiding the pitfalls of bad debt.

Having a mortgage, car payment, or student loans can be seen as investments in your future. While a car payment may not be ideal, we can’t rely solely on bicycles for transportation. The key is to ensure you’re not accumulating bad debt, which can hinder your financial progress.

Empowering Financial Choices

Living within your means ensures you won’t have to resort to credit cards to fund your lifestyle or stretch yourself too thin for big purchases. It empowers you to save, and more importantly, it allows you to develop a solid investment strategy.

Think about creating a long-term plan for growing your money over a 20, 30, or even 40-year career. Consider investments in real estate, your education, and your career. With the right mindset and plan in place, you can take some of your savings and invest for the long haul.

A Clear Answer

So, when you speak with your financial advisor about wealth-building strategies, you might hear some common suggestions like steering clear of bad debt, considering real estate when the opportunity arises, and trying to live within your means. This approach will enable you to save and invest effectively, providing the financial freedom you need when opportunities arise—without dipping into credit cards or overextending yourself.