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Building Wealth

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Building Wealth

I'm just looking for your opinions on what things matter most, and the steps you should take, to become wealthy over the long term. Thanks!

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Re: Building Wealth


@NeverDebt wrote:

I'm just looking for your opinions on what things matter most, and the steps you should take, to become wealthy over the long term. Thanks!


Building wealth is just like dieting. The general statements you hear all the time apply:

 

- Spend less than you earn, and invest/save the rest. This and compounding are the way.

- Compounding is your friend.

- Don't expect huge gains overnight; similarly, don't react to sudden losses with panic. Slow and steady wins the race.

- Look at long-term trends on stocks and don't get hung up on micro-events or other short-term things that swing stock prices. Those only matter to day traders who are going to dump their positions in a month anyway.

- Avoid fads and resist the urge to buy on FOMO. As Buffett says, be fearful when others are greedy and greedy when others are fearful.

- Don't try to time things if playing long-term. Whether you hit the absolute bottom of the dip and buy a stock for $20 or just hit the trough and buy it for $25, remember in 20 years if that stock is $200 you're still up big.

Message 2 of 6
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Re: Building Wealth


@iced wrote:

@NeverDebt wrote:

I'm just looking for your opinions on what things matter most, and the steps you should take, to become wealthy over the long term. Thanks!


Building wealth is just like dieting. The general statements you hear all the time apply:

 

- Spend less than you earn, and invest/save the rest. This and compounding are the way.

- Compounding is your friend.

- Don't expect huge gains overnight; similarly, don't react to sudden losses with panic. Slow and steady wins the race.

- Look at long-term trends on stocks and don't get hung up on micro-events or other short-term things that swing stock prices. Those only matter to day traders who are going to dump their positions in a month anyway.

- Avoid fads and resist the urge to buy on FOMO. As Buffett says, be fearful when others are greedy and greedy when others are fearful.

- Don't try to time things if playing long-term. Whether you hit the absolute bottom of the dip and buy a stock for $20 or just hit the trough and buy it for $25, remember in 20 years if that stock is $200 you're still up big.


+1

 

And just for my two cents this is my personal opinion. You make money from investing and not from saving. After you establish a 6-12 month savings, invest all extra money. We're uable to tell the future of stocks, but hstory shows that the economy always recovers. Also get yourself a side hustle (airbnb, rent out a room, etc). 

12/18/19




05/27/20





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Message 3 of 6
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Re: Building Wealth


@ClassicMan wrote:

@iced wrote:

@NeverDebt wrote:

I'm just looking for your opinions on what things matter most, and the steps you should take, to become wealthy over the long term. Thanks!


Building wealth is just like dieting. The general statements you hear all the time apply:

 

- Spend less than you earn, and invest/save the rest. This and compounding are the way.

- Compounding is your friend.

- Don't expect huge gains overnight; similarly, don't react to sudden losses with panic. Slow and steady wins the race.

- Look at long-term trends on stocks and don't get hung up on micro-events or other short-term things that swing stock prices. Those only matter to day traders who are going to dump their positions in a month anyway.

- Avoid fads and resist the urge to buy on FOMO. As Buffett says, be fearful when others are greedy and greedy when others are fearful.

- Don't try to time things if playing long-term. Whether you hit the absolute bottom of the dip and buy a stock for $20 or just hit the trough and buy it for $25, remember in 20 years if that stock is $200 you're still up big.


+1

 

And just for my two cents this is my personal opinion. You make money from investing and not from saving. After you establish a 6-12 month savings, invest all extra money. We're uable to tell the future of stocks, but hstory shows that the economy always recovers. Also get yourself a side hustle (airbnb, rent out a room, etc). 


+1 +1

I tell people all the time it's like people who to go the gym it's a very easy to understand analogy... I am very small and skinny so I am no gym professional, but I do enjoy going and eating healthy etc.. 

A lot of people(similar in becoming muscular) believe there's some secret, quick way to becoming wealthy and usually the people selling those "methods" are becoming rich off of you buying their methods haha, for the everyday person it's important to start with the fundamentals and once you get those down then you can start getting more specific and going after it. So if you're buried in debt then obviously start with Dave Ramsey baby steps or something along those lines. @NeverDebt hit the fundamentals in his bullet points. @ClassicMan is not wrong with his theory about investing, however remember when you're talking "investing" that doesn't automatically equate to dumping money into the stock market. Investing in a side gig(business of some sort), or investing in real estate(renting a room, buying a property to rent etc.) fall into the investing realm.

Remember don't get discouraged and don't dismiss your progress because "oh this person has way more than me" etc. I see that a lot too, everyone goes at their own pace, just like the gym! Also you said the steps you should take to become wealthy, everyone has their own definition of wealthy as well. Side note: I believe Dave Ramsey's ideology behind credit cards is partially wrong, he believes people should never use credit cards and they're only a road to disaster. There's many people out there, including myself, who have no issues using them for their reward benefit without paying any interest, you're earning additional income with very little effort input as well as building credit Smiley Happy

Good luck on your ventures.

Message 4 of 6
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Re: Building Wealth

@800who perfectly said. One thing I have learned recently is we all have a skill that we can monetize. And thats excatly how it all starts. We definitley all have a different defintion of wealth. Best of luck to you.

12/18/19




05/27/20





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Message 5 of 6
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Re: Building Wealth

@ClassicMan  Also like people who become absolutely shredded for lack of better terms, by going to the gym 6-7 days a week and they eat completely perfect with no cheat meals, they get the results because of the effort they put in, if you want to become "wealthy" you can't think putting $25 in a 0.01% interest account every paycheck is going to make you a millionaire, you have to really want it. This first started for me at 18, just wanting to get good credit so I could get a decent auto loan, then I lost my job at the time and had a little bit of savings and ended up being fine, but it definitely scared me and I told myself I never want that feeling again and if I lose my current job I want to be completely set... now being frugal and working a lot is just part of my everyday lifestyle, I have no desire to make crazy consumer purchases, like when people who eat healthy have no desire to eat a whole pizza. Everytime I hit a new milestone, whether it be credit score, credit limit, liquid savings, I just focus on the next one up, and constantly seeking that new goal to be achieved is the biggest reward of it all.

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