The Top 5 Wealth Building Strategies
There are 5 primary ways to build wealth. Depending on how much wealth you want to build you can choose to use one or more of these strategies:
- High Income-earning job. If you are highly skilled or are willing to work a lot of hours you can earn a high income. A high income in Canada is in the range of $300,000 + per year. Examples are Doctor, Lawyer, Engineer, Technology specialist, Salesperson, Trades - especially if you are willing to work in remote locations.
- Building a successful business. Where you can take a high income, grow retained earnings, or sell the business for a good profit. Many entrepreneurs will do this several times during their lifetime.
- Investing in the stock market. This is the easiest, but it requires money to get started, and it’s slow at the beginning. This is an emotional rollercoaster and you are your own worst enemy. You can see the value of your investments on a daily basis rise and fall and it can drive you crazy. However, the stock market is the single greatest wealth-building tool the world has ever seen and it is accessible now to everyone.
- Using leverage. Borrowing to invest, which has its risks that need to be weighed. It’s nearly impossible to build wealth without using leverage. Otherwise, you have to win the lottery, have a high income, or inherit money.
- Real Estate. I have always enjoyed this one and we have done well with it as have many other people. It’s a more advanced stage of wealth building and takes access to more cash to get started.
There’s no right or wrong approach or an approach that is better than the other. It depends on you. What your interests are, your skills, and how much work you want to do. All of these strategies require a lot of extra hours to implement. There isn’t any success without a lot of extra work. There is no easy money to be made.
I have met with many financially successful people in my life and all of them made their fortunes in one or more of the strategies above. The difficult part of building wealth is getting started. That’s why the first million is the hardest. The following millions get easier and easier. The more money you have to work with the more it can grow and the more you can diversify your portfolio holdings.
Questions before you start:
What is financial success in your mind?
How much wealth do you need to be considered wealthy? Or, financially independent?
What areas of wealth-building interest you the most and why?
Are you willing to put in the work? (70-80 hours per week)
Check out lesson 2 "The 5 Essentials For Getting Started On Your Wealth-Building Journey".
Willis J Langford BA, MA, CFP
Nancy R Langford CRS
