Fuel Your Growth

I was talking with a group of young professionals the other day. They wanted to know how to grow their wealth and create more future opportunities. They had diverse career paths. Each had unique opportunities for investing. Everything I shared with them can be applied to you and your situation.

We talked through the value of compound interest. That it takes just as much energy to turn $1 into $2 as it does to turn $1 million into $2 million. That created an a-ha moment. Given enough time—say a few hundred years—that dollar could possibly compound its way to real wealth.

But, given the constraints of modern life expectancy, it’s helpful to compound money faster. To do that requires pouring in enough fuel—contributing enough money– to get the numbers high enough that compound interest can take over and do the bulk of the work.

But, given the constraints of modern life expectancy, it’s helpful to compound money faster.

Think about how compound interest has been working for Warren Buffett, Bill Gates and Elon Musk. They could each add millions more into their investment accounts and it wouldn’t move the needle on their fortunes. Compound interest is doing virtually all the work. Fortunately, you probably don’t need to get remotely close to their level to do everything you want in life.

Once these young professionals understood the benefits of compound interest, we discussed how to improve your cash flow to be able to fuel your investments. The key was paying yourself first—making investments. Then, keeping necessary expenses to a reasonable level. That allows enough money left over to enjoy the fun stuff today without sacrificing your future.

From there, we discussed the best types of investments to grow long-term wealth. Historically, that’s been things like stocks, private business ownership and real estate. Really anything that can outpace inflation.

From there, we discussed the best types of investments to grow long-term wealth.

Further, we discussed ways to stretch your investment dollars even further by minimizing taxes. We also emphasized the importance of maintaining flexibility since none of us knows precisely how our future will play out. Or how today’s goals may change tomorrow.

I told the group, their greatest strength right now is time. They have the time necessary to build an efficient tax strategy, one they can tweak year to year. They have the time necessary to harness the power of stocks. At this point, volatility is their friend. And most importantly, I emphasized they have the time necessary for compound interest to show its true wonders.

But, here’s the thing. Everything I told this group can be applied to investors at any age. For all of us, we’ll never have more time than we do today. So, regardless of our starting point, each of us can move forward in the right direction if we’re committed to doing so. Each of us can create a better strategy that will open up more opportunities.

Everything I told this group can be applied to investors at any age.

Yes, we might not be 22 anymore. (Oh, how I wish)! But, we can still act like we are, with all the optimism of youth. And, we can always seek ways to better our lives by making better use of our money.

The future is yours. Whether you’re 22 or 82. You just have to commit to making it so.

Okay, let’s hear your opinion:

Okay, let’s hear your opinion:...

What’s the one thing you want to do to fuel your growth this summer?

This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.

All views/opinions expressed in this newsletter are solely those of the author and do not reflect the views/opinions held by Advisory Services Network, LLC.