You’ve Worked Hard to Earn It. Now, Make Your Money Work for You.

If you’re like most high-income earners, you’ve put years into building your career and accumulating wealth. But making money is only the first half of the equation. The second half—keeping, growing, and making it work for you—is where real financial security comes in.

To reach that level, you don’t need an economics degree or a Wall Street background. What you need is a solid plan, smart strategies, and sometimes, an expert to guide you along the way.

In this guide, we’ll walk through essential steps to building your own wealth machine—a setup designed to grow and protect your money, weather market ups and downs, and align with your unique goals.

Step 1: Diversify, But Don’t Diversify Blindly

You’ve probably heard “diversify your portfolio.” But what does that really mean? True diversification isn’t just spreading money across different assets. It’s a strategic allocation based on your specific goals, tolerance for risk, and time horizon.

Here’s how to think about it:

? Avoid Diversification for Its Own Sake: Putting money in various investments without understanding them won’t protect you from risk. Know what you’re investing in, why you’re investing in it, and how it fits into your bigger plan. This could include a balanced mix of stocks, bonds, real estate, and alternative investments like private equity or hedge funds if you’re an accredited investor.

? Understand Each Investment’s Purpose: Ask yourself: is this investment meant for growth, income, or both? For example, if you’re buying bonds, consider the current interest rate environment. If you’re investing in real estate, understand the different approaches—direct ownership and self-management, syndications or real estate funds, or REITs. Each has pros and cons, such as the control and potential appreciation with direct ownership versus the liquidity of REITs. The key is choosing what best supports your specific strategy.

Strategic diversification gives you more than just a collection of assets—it provides a framework that supports your financial goals, protecting you from unnecessary risk.

Step 2: Rebalance, But Don’t Overdo It

Rebalancing your portfolio helps keep your risk in check, but too much rebalancing can create unnecessary taxes and fees. Over-managing a portfolio is a common mistake.

General guidance: rebalance once a year or after a significant market change. In tax-deferred accounts like IRAs or 401(k)s, rebalancing doesn’t trigger taxes. However, in taxable accounts, selling assets may create taxable events, impacting your bottom line.

A simpler way to rebalance? Use new contributions to adjust allocations rather than constantly buying and selling. This way, you stay aligned with your goals without incurring additional taxes.

Step 3: Use Dollar-Cost Averaging (DCA) to Build Wealth Steadily

Dollar-cost averaging (DCA) is a straightforward way to grow wealth and remove the emotional element from investing. Here’s how it works: you invest a fixed amount at regular intervals, regardless of the market’s highs and lows. Over time, this approach lowers your average cost per share.

With DCA, you’re always in the game, buying during both market highs and lows. This consistent approach keeps you from trying to time the market—an approach that rarely works in anyone’s favor.

A steady investing routine during market corrections can lower your average cost, setting up potential gains when the market rebounds. This approach, however, is not without risks, and maintaining consistent contributions is key.

Step 4: Stay the Course for Long-Term Growth

One of the biggest mistakes investors make is panicking during market volatility. Short-term noise can lead to short-sighted decisions, which can undermine long-term financial goals.

If you have a solid plan, stick with it. Markets naturally fluctuate, but with a balanced, thoughtful portfolio, those dips become opportunities, not threats.

Think long-term. Markets tend to recover over time, and patient investors who stick to their plans tend to see results in public markets, private investments, and real estate.

Step 5: Don’t Go It Alone—Work with a Fiduciary Advisor

Navigating finances on your own can be tricky, and choosing the wrong advisor can be even riskier. The key is understanding the difference between a fiduciary advisor and a broker.

A fiduciary is legally bound to act in your best interest, while brokers operate under a suitability standard, which may allow them to recommend high-commission products that might not serve your needs.

Working with an advisor who’s focused on your interests helps you avoid costly mistakes. I’ve seen too many people rely on advice from friends, family, or the internet—only to end up in a financial mess. Personalized, expert guidance makes a difference, especially when it’s tailored to your goals.

If you’ve made mistakes in the past or had bad experiences with advisors, don’t let that stop you from taking control of your future. Find an advisor you trust, with a system that works, and build wealth in a way that supports your goals.

Ready to Start Building Your Wealth Machine?

If you’re ready to start building a wealth plan designed to grow and protect your money, I offer a Complimentary Wealth Strategy Call. We’ll review your unique situation, and at the end of our call, you’ll receive a free, one-page financial plan tailored to your goals.

Book Your Complimentary Wealth Strategy Call Now!

https://calendly.com/bfawealth/new-strategy-call?month=2024-10

About Me: I’m Mateo Dellovo, founder of BFA Wealth Management. With over 25 years of experience, I help high-income professionals grow and protect their wealth. My goal is to help you maximize returns, manage taxes, and build a future you can count on.

Disclaimer: This information is for educational purposes only and should not be considered financial, legal, or tax advice. Please consult a qualified professional to determine the best strategy for your specific situation.