Many individuals are looking for effective ways to increase their net wealth and achieve financial stability, away from the possession of major technological companies such as Elon Musk or to become global stars such as Taylor Swift.
A report published by Forbes offers 6 main strategies supported by experts’ opinion that helps improve the financial situation and achieve sustainable growth in net wealth.
1. Understanding financial mathematics
The report indicates that the first step in building wealth is to understand the equation of net wealth, which is the difference between assets and obligations.
- Assets include property such as homes, cars, bank accounts, and pension plans.
- While debt obligations such as credit cards and real estate loans include.
The individual can increase his net wealth by reducing debt or increasing assets, and it is preferable to combine the two strategies to achieve faster results.
2. Pay the debts intelligently
The report indicates the importance of distinguishing between low -benefit debts and high interest.
Loans that bear the benefit of the Sunday box may be acceptable, while loans of bilateral benefit can be financially toxic.
It is advised to pay the debts with high benefits first, as disposal can significantly enhance the net wealth.
3. Use the “Financial Classification” strategy
Alex Michelka, Vice President of “Wellth Front”, recommended the use of “Financial Classification” approach, where the money is divided according to time goals:
- Short -term assets: cover urgent and surprising expenditures, and it is preferable to keep them in cash in high -yield savings accounts.
- Medium -term assets: are used to achieve financial goals within a period ranging from one to 5 years, and can be invested in the treasury bonds with competitive returns.
- Long -term assets: intended for retirement or children’s education, and can be invested at higher risks because they will not need them soon.
4. The risks are wise
The report indicates that achieving wealth requires some risk, says Ron Talo, founder of Talo Financial Service, says: “Savings accounts do not accumulate wealth in the long run.”
Tal Bander, CEO of “Gill”, agrees to this by saying: “Buying assets and investment is a decision that is no less risk than the lack of investment itself.”
In this context, Diana Heili, Vice President of Amirreise Financial, recommends increasing retirement plans, which provide advantages such as tax discounts and free contributions from the business authorities, making them less dangerous than direct investment in financial markets.
As for individuals who do not have a pension plan, there are other options such as:
- Investing in leased properties with low fees.
- Buying bonds and financial tools in light of the high interest rates.
- Having small businesses in areas witnessing continuous and non -replaceable demand.
5. Benefit from debt strategically
While debts are usually an obstacle to building wealth, some financial advisors, such as Chris Campitis of “Barnum Financial Group”, see that debts can be used as a tool to increase assets, such as obtaining loans to buy real estate or other investments.
However, it warns of possible risks if the assets lose their value, stressing the importance of consulting experts before making any financial decisions.
6. Setting a reverse budget
Philip Telipa, the owner of “Benzina Wilth”, encourages his customers to use the “reverse budget” approach, as the person begins to determine an inspiring financial goal, such as early retirement or travel around the world, and then build a financial plan to achieve this goal.
The report indicates that this method gives individuals a motive to avoid unnecessary spending and focus on the long -term financial goal.
The report emphasizes that building wealth does not necessarily require huge projects, but rather depends on making smart financial decisions, such as payment of high interest debts, investment based on time goals, and carrying the risks studied.
