I have a confession to make.
I’m never going to make millions of dollars on a single investment. I’m never going to create a start-up that changes the world and becomes a unicorn. I’m never going to get rich overnight. It’s simply not in my DNA. You wouldn’t be human if you didn’t dream about huge or seemingly easy riches. But I’m okay with the fact that easy riches aren’t in the cards for me. Instead, I’ve chosen (let’s be honest, accepted) the slower path to building wealth. But there are some downsides to this path; I don’t get to become rich overnight, I don’t get to create a world-changing company, and I don’t get to know what it’s like to deal with a life-changing amount of money. You also won't catch me bragging on social media about how much money I made on a high-flying stock or business venture, or becoming a charlatan guru who preaches the easy steps you can follow to become wealthy, or writing a Medium post about how transcendental meditation changed my life once I became a billionaire. There are many upsides to being comfortable in your own skin as an investor:
Personally, building wealth slowly over time suits my personality better than the alternatives. I simply don’t have the emotional makeup to take extreme positions when it comes to investing. It’s important to remember for every Tesla investor who hit the lottery, there are thousands of other tickets that never hit. And I’m not necessarily saying those people who pursue this type of strategy are wrong. Simply that I'm not one of the people who have the intestinal fortitude to hold a moonshot investment that swallows the rest of their portfolio whole. As long as people go into this type of strategy with their eyes wide open to the potential risks, who am I to judge? Life and risk are both full of trade-offs. Sometimes a large factor in the success, or failure, of any investment or wealth-building strategy comes down to managing, or the failure to manage, emotions. But the best part about building wealth slowly? It actually works! The more I sit down with successful investors I realize this, as you accumulate more wealth it's not about trying to hit the home runs, it's about preserving what you already have. It's about not making mistakes – instead of the home runs, you hit singles or doubles consistently, year after year. I’ve been saving and investing personally for more than a decade-and-a-half. Although it was hard to see progress at the outset, I have more money than I ever would have thought possible when I first started my financial journey. But let's be honest, building real wealth is... boring. It takes time. Month after month, year after year you inch closer to your goals. There are no shortcuts. Maybe with some extreme bets within my portfolio I could have built more wealth faster but those bets also could have crashed and burned, leaving me in a far worse position. These what-ifs are useless when it comes to your finances. In my experience, the most important aspect of my slow but steady, deliberate wealth-building strategy is not that it works, but that it works for me and it works for clients. Some people are too tempted by boatloads of risk. Others prefer day trading or concentrated deep value investing or tech inventing or venture capital or investing in private businesses or real estate or starting their own business or something else entirely. And that’s fine. There are plenty of different ways to build wealth. The important thing to remember is you don’t have to follow someone else’s path just because it seems faster or easier. Spotting trade-offs and managing the risks in life and investing is where my experience and knowledge as a CFP benefit my clients and me personally.
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AuthorBrandon Yanchus is a CERTIFIED FINANCIAL PLANNER™ with over a decade of experience. This is his personal blog where he shares what he's learned helping families, professionals, business owners and retirees grow and protect their wealth. Archives
February 2024
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