How to Build Wealth for Your Family by Demar Lewis, III, PharmD

You no longer need to earn a 6-figure salary to create a good-sized nest egg and accumulate wealth. A better financial future requires proper planning and solid savings and spending strategy for every phase of your family or life. Whether you are a recent university graduate, a mid-life parent getting your children ready for school, or a senior citizen, working to build wealth now could bring your family comfort later.

Proper financial planning

Start with a solid roadmap that specifies the direction of your current and future sustainability of your family’s wealth. The roadmap should outline how your wealth will be generated, managed, and invested for your heirs and future generations. It must incorporate a tax planning strategy to minimize the impact of tax on your assets.

No matter how much wealth you can accumulate, without a sound financial plan and clear wealth accumulation goals, the chances are that you will lose it in the future to taxes and poor investment choices. This is why it’s recommended to seek financial planning counsel.

Learn how to invest

Investment education is essential if you want to build wealth for your family. Higher education in the form of a graduate degree is essential, but it’s equally important to have in-depth knowledge about the specific investments you want to make. Learn from already wealthy people, invest-related events, and financial or investment experts.

Just think about it; there are basic principles of wealth accumulation such as being deeply motivated, integrity, being courageous, being disciplined, and more. However, it would be best if you had more than the basic concept of wealth accumulation to grow your wealth. Each investment sector works differently. For instance, accumulating wealth through real estate investments isn’t the same as investing in corporate stocks. Similarly, investing in precious metals isn’t the same as investing in agriculture.

Make steady progress

Unless you win a 10 million dollar lottery, you cannot build wealth overnight. So, take baby steps. Focus on implementing your wealth creation or investment plan step-by-step. For example, it’s better to save a small amount every month consistently than saving a huge amount some months and then pull cash out of your savings in some months. A steady growth points to one thing – wealth accumulation.

Additionally, making regular investments, no matter how small, spreads out your investments risk by making sure that you don’t make all your stocks or fund purchases at the highest point in the financial markets. This concept is commonly referred to as dollar-cost averaging.

Lastly, work with a financial advisor.

An experienced financial planner can analyze your investment and wealth creation strategy, identify pitfalls, and help you perfect your plan. Besides, he or she can help you understand different investment options available, the opportunities associated with them, and the risks involved.

For example, investment options with a higher rate of return are often linked to higher risks. If you’re in your twenties, it’s possible to choose investment options with higher ROI because you still have the chance to wait for the market to recover fully. Someone closer to their retirement may want to switch to conservative investments to protect their cash.