|
The Key To Building Wealth
The most important element that sets apart the wealthy from those
who are not wealthy is a commitment to investing and managing their
money. Those who become wealthy tend to invest significant portions
of their usable income, and they increase their investments with
those managers who produce consistent returns for them over time.
Wealth building can be simplified to the following 3 principles:
- Spend less than you earn;
- Invest the balance;
- Re-invest the profits for compound growth. This
is what Albert Einstein called the 8th wonder of the world.
Within these you can add:
- Asset Allocation: This is generally defined
as the allocation of an investor's portfolio over a range of investment
strategies and instruments in the correct and appropriate ratios.
It is widely agreed that asset allocation accounts for a large
part of the variability in return of a typical investor's portfolio.
It follows that determining an appropriate asset allocation is
the most important decision an investor has to make. Affinity Consulting
help diversify your investments over different asset classes and
then select investments within each class that are actively managed
and well diversified. This generally involves using "funds
of funds".
- Education: Another important characteristic
of the truly wealthy is their ongoing quest for financial education.
It is sad but true that many people spend more time choosing their
car than they do choosing their pension. Affinity Consulting are
committed to providing you with all the information you need to
make an informed decision and then to keeping you informed about
your investment in particular and the world in general through
this website and newsletters.
Unsuccessful & Successful Investors
| Unsuccessful
Investors |
Successful
Investors |
| Speculate
rather than invest |
Follow a
definite wealth plan |
| Use investment
vehicles that don’t match market realities – they
may be in long only funds in a falling market |
Invest in
non-correlated strategies to make money in all conditions |
| Have improper
asset allocation |
Use dynamic
asset allocation |
| Fail to
take and reallocate profits |
Take profits
and lock in gains |
| Have short-term
focus. No long-term wealth plan |
Manage fear
and greed |
| Fail to
take consistent action |
Manage risk
and generate optimum performance |
| Invest with
managers whose interests are not aligned with their own |
Get competent
advice and coaching |
Where Are You Now?
In planning the road ahead, it is useful to take stock of where
you are right now.
- Do you have a financial plan?
- If so, have you achieved all that you set out to do?
- Have you found investments that you can be confident with?
- Do your investments produce the realistic returns you desire?
- Are your investments growing consistently?
- Are you focused on long-term financial prosperity rather than
just short-term lifestyle enhancement?
Affinity Consulting's trained and experienced consultants can help
you take stock of your current situation, identify areas for improvement
and plan for your future. Contact us today to
arrange a consultation.
|
