Building wealth involves much more than just investing in stocks and bonds
by Mark Ford
Most rich people get that way by consistently doing the following nine things:
1. Giving top priority to increasing their net investible wealth with more income, not maximizing returns
2. Spending less as a percentage of net income as it grows so they can save more
3. Understanding debt and using it occasionally and strategically to build wealth
4. Investing in stocks and bonds with discipline—i.e., without expecting to get returns that are much higher than market averages
5. Insuring themselves against “black swan” events but not investing with the hope of profiting from them
6. Owning tangible, portable, and non-reportable assets as a reserve that can be tapped into at opportune moments
7. Investing in safe real estate—i.e., income producing properties
8. Investing directly in private enterprises and other “outside Wall Street” opportunities
9. Keeping a substantial store of cash to be used when “cash becomes king.”
As you can see, investing in stocks and bonds is only one of nine strategies you must follow to become rich, but that was the only one the two money management firms I tried cared about.
Source: ETR