The oh-so-simple secret to building long-term wealth

Deadline Calendar Means Target and Due DateKJ: And…the oh-so simple secret to building long-term wealth boils down to a few basic concepts: time and patience. That’s it. Take patience, and add in a little bit (or a lot a bit) of time, and voila!

The inspiration for this blog came when we stumbled across a Motley Fool video some time ago that really emphasizes this point in further detail, but the reality is that it is that simple.

Time
The longer time frame you have to accomplish your goals, the more comfort you can have in knowing whether you will accomplish them. Not only do you have a longer period of time to actually save TO your goal, but if you’re investing your money, then it means you have time to weather the markets.

We’ve written about this concept a few other times too on starting your savings while you’re young. Check out one of our prior posts for some startling numbers on why it’s so important to save early and let time be on your side!

Patience
Most goals you set are not very short-term. In fact, most of them are probably very long-term goals when you think of purchasing a home by building up a down payment, retirement (that could be 20+ years away), children’s education (that could be 15+ years away). Keep in mind that getting to those goals takes years, so don’t get frustrated if you’re making what seems like slow progress. Check up on your goals periodically and how you are doing: it’s a good way to not get discouraged and to actually see the progress you are making.

If there’s one thing that markets do, it’s that they ebb and flow. Some years will be great, some will be terrible, and others will be middle of the road. In fact, you probably will have very few “average” years. Learn early to take the panic out of investing and try to keep as level-headed and analytical a view as you can. Endure the ebb, so you can be part of the market’s subsequent recovery (flow)!

Making any investment should not be a whimsical decision. Whether you’re investing in your own “human capital” (i.e. an investment in yourself), buying bonds, or buying stocks it can take some time to realize the fruits of your labor/analysis. Keep patient and don’t react instantly. Sure, if fundamentals change or new information comes to light it may make sense to change course, but if your thesis hasn’t changed and the fundamentals are still there, don’t panic in a moment of uncertainty!

Get Your Plan on Track
With such a simple solution to build your wealth over time, why wait? Start creating those good saving habits early in your life, and it will have a compounding effect over very long time periods. The younger you start saving and investing, the better! There’s always going to be something that you could say “let me get past this month, and we’ll start next month.” Learn to get your expenses in check with a handy-dandy budget tool, and start maximizing what you save each month.

So what’s stopping you from getting your wealth kick-started?

Image courtesy of Stuart Miles / FreeDigitalPhotos.net. The oh-so-simple secret to building long-term wealth is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Share in the Discussion