Wealth is not finite. That implies it can be created.
There are three generally accepted, primary methods by which to create wealth. These are: 1) receiving a windfall from an external source such as lottery winnings or an inheritance, 2) building up your own business, or 3) implementing a disciplined savings and investments regime.
Obtaining wealth through a windfall can be a dangerous route for people who aren’t used to wealth, and thus are unprepared for it. It’s imperative to employ appropriate advisors to ensure the newfound wealth doesn’t become a trap. Learning how to invest and integrate wealth into a new lifestyle is key.
Building a business is another way to create wealth. Starting your own business, investing in that business, and nurturing it, all the while smartly managing risk can result in a significant increase in wealth. Considerable time and effort are required to enable your business to grow to its potential. You’ll need to make informed decisions every step of the way, which means it’s essential to have a well-thought-out business plan for each stage of the journey.
Disciplined investing and saving are arguably the most accessible strategies to create and keep wealth, although you need to be clear about your goals and your strategy. The type of investor you are should change over time. When you’re young and still have many income-earning years ahead of you, a riskier strategy may seem more attractive. As you approach your golden years and the possibility of your income decreasing, you might prefer investments that have more-certain returns.
Focusing some of your attention on tax planning may help you reach your financial goals quicker if you utilize some tax-savings provisions many people are unfamiliar with.
In whatever way you are able to create your wealth, it’s important to remain true to your personal and familial values. In this way you’ll be able to more fully enjoy the wealth you’re able to create.
In the series of future blogs (Financial Fortune Series) I will be discussing relevant financial and relational tactics designed to help you manage your wealth intelligently.
Invitation for Discussion:
If you would like to discuss this article in greater detail, or any other business law matter, please do not hesitate to contact one of the lawyers in the Tax group at Shea Nerland LLP.
Note that the foregoing is for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.
Also posted at AdvocateDaily.com.