Some people view financial confidence and building wealth as mere luck, but there is more to it than just being lucky. Building wealth doesn’t happen overnight or by chance, and there are no secrets or shortcuts to building wealth.
Wealth isn’t bought or instantaneous unless you ‘get lucky’ and win the lottery; however, the odds of winning may not be in your favor. Building wealth and financial confidence takes time and may happen with these time-tested, comprehensive actions:
- Planning- financial planning, budgeting
- Consistency- regular contributions
- Strategy(ies)- investments such as a 401(k), Roth IRA, Annuity, and other investments suitable for you.
- Actions- trading, rebalancing, and other actions
- Monitoring- watching the progress and revising investment strategies or your plan when appropriate.
In addition to the above actions, these four traits may help you work toward financial confidence:
Self-discipline is the ability to control one’s thoughts and actions and pursue what one thinks is right, despite temptations. People that practice self-discipline can deter gratification; for example, they consistently save a portion of their income versus spending it all. Their gratification will come when they have saved for a goal, for example, retirement, and can retire with financial confidence versus having to work the rest of their lives.
Focus is the ability to concentrate on something, regardless of distractions. For example, focus on your goal of building wealth, one step at a time, by consistently investing each month.
Risk management identifies, evaluates, and prioritizes risks that can hinder pursuing of your goals. Evaluating risk is essential to identifying investment strategies that align with your risk tolerance, goals, and financial situation.
Expertise is knowledge in areas such as investing, accounting, or taxes. However, expertise doesn’t mean one is an expert but is open to professional advice from others specializing in specific areas—for example, financial professionals, tax professionals, advisors, or business advisors. People with the expertise trait seek education from books, seminars, or others and value learning.
Building wealth and financial confidence can take decades to establish. But with appropriate planning, short-term and long-term goals, strategy, and execution, you’re on your way toward your goal. Good luck!
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