A Long, Prosperous Road: Building Long-Term Wealth

Contrary to what the majority of people think, accumulating wealth can be simple—if approached in a structured and systematic manner. We’re not relying on luck or placing our hard earned savings into get-rich-quick schemes that could leave both us and our loved ones broke. There are no seminars, no quick tips, or fast, easy tricks that can guarantee massive returns. Building wealth simply involves keeping an eye on our long-term goals

In my career as an independent Certified Financial Planner, I have worked with many different people, all with different backgrounds, goals and dreams. However, every one of my clients has come to me with the desire to build and preserve financial stability for themselves and their families. Through the many individualized investment approaches that I have worked with my clients to create, I have come to realize that achieving financial success hinges on 3 principles: patience, consistency and trust.

1. Patience

Accumulating wealth doesn’t require a  “what have you done for me today” style approach. For almost everyone, the best strategies for achieving financial stability are centered around one thing: long-term investments. While Hollywood tells us stories about investors dominating the stock market, “playing the game” for massive gains, the reality is vastly different: slow and steady wins the race.

It’s simple. It’s cliché. And I know it works.

Consider this age-old example found in a recent edition of Business Insider:

“[Investing] $50 a week would result in $16,473 after five years and $40,678 after 10 years. Imagine how much money would accumulate if you set aside a bit more each week, and did that for several years. The earlier you start, the better.”

While past performance is not indicative of future results, it's a powerful example of the power of compound interest and investing. With my clients, I always work to craft investment plans that build on this principle of patience, with the aim of steadily building their net worth while simultaneously ensuring their current and future financial stability.

2. Consistency

You didn't achieve your success without having some innovative ideas or taking a few risks. As such, it's natural to want to be part of the latest trendy stock or new popular fund. While a diversified portfolio will likely be key to your long term success, it's consistency in your investment that will usually win out. In today’s society, it can be extremely tempting to take a tip from a flashy, charismatic investor you come across on social media.

However these massive one-time-buys are usually a mistake. Instead of trying to make a million in a minute, try being consistent. Make it a habit to ensure that you are saving more than you are spending. Prevent your everyday expenditures from placing your long-term financials at risk. Todd Tresidder, featured financial author, highlights this concept of consistency in an article for Financial Mentor,

“A daily habit of frugality saves small amounts every day that compound and grow over long periods of time to become substantial wealth. Try this Latte Factor calculator to prove it to yourself.”

The same applies to your investing habits as well. Smart, calculated moves now will pay dividends in the future.

3. Trust

Trusting in your long term goals is key to ensuring your financial stability. Though it's very important to take the time to rebalance your portfolio and adjust investments when there are large changes in our lives (such as welcoming a new member to the family), there's nothing that derails a solid financial foundation like wishy-washy behavior or sudden, impulsive decisions. Building long-term wealth rarely involves quick decisions. 

Instead, working with a financial advisor to develop a plan and sticking to that plan will likely be the key to ensuring your financial stability decades into the future. Start early with your savings and wealth-building and keep with that plan until you reach your goal. Trust me, your future self will thank you. 

Paving Your Own Road

Building a solid financial base is no easy task. Like any major challenge we face in our lives, it will be difficult to remain patient, true and steadfast. There will be obstacles and there will be temptations. However, if you make a concerted effort to stay true to these principles and work with your financial advisor to ensure your investments reflect them, you'll be on a great path to building and sustaining long-term wealth.

How do patience, consistency and trust pay off in your wealth management? Share your experiences by tweeting @Lindsey2Wealth!