building wealth is a marathon, not a sprint

Believe it or not, not all those who you would consider wealthy were born with money. Wealth can be achieved strategically through smart money habits, investing and obtaining specialist advisory services tailored to individual needs and goals.

“People in the UK think the top 10 per cent of earners – those bagging on average £60,500 a year – are wealthy.” But don’t forget, wealth isn’t simply defined by your income, it’s defined by net worth (assets minus liabilities). Do you know what your net worth is?

Continue reading to learn tips on how to build wealth… 

Goals

To figure out how you’re going to build wealth, first you need to identify what you’re working towards…what are your financial goals? It could be to buy the house of your dreams, travel the world or live a luxurious retirement. Once you’ve identified your goals, you can move to the next step: planning.

Financial planning

Financial planning isn’t a one-size-fits-all solution. Your circumstances and goals will be different to the next person, which is why you need a tailored plan to make your money work better for you.

The key to building wealth is planning early on; giving yourself enough time to grow your money and also support you through any financial hurdles in life.

What could this plan look like? A financial plan includes information about your cashflow, savings, debt and investments. It also includes the steps you need to take to build wealth and what strategies need to be implemented to keep you on track. This might include:

•     Building an emergency fund

•     Paying off debt

•     Paying off your mortgage

•     Developing multiple income streams

Tax efficiency

Building wealth isn’t just about amassing assets, it’s also about minimising unnecessary costs. You want to protect as much of your money as possible.

The wealthiest people manage their assets like a business, creating structure. If you want to pay a lower tax rate you need to consider tax-efficiency in your financial plan. It’s definitely worth seeking professional advice so that you know how and when to spend your money and where to keep it to reduce your income tax and maximise tax relief. 

Financial security

Now, there wouldn’t be much point in building wealth if you did absolutely nothing to safeguard your financial future.

Making well-informed financial decisions might sound like common sense, but you would be surprised by the amount of people who act without considering the risks or tax implications. To achieve financial security, you must pay attention to what risks your finances are exposed to and what you will do to mitigate them. Carrying proper insurance, planning ahead and maintaining an emergency fund are all essential.

Remember: No matter how little you have; you can still build wealth from nothing. It’s all about staying motivated and finding the right people to support you on your financial journey.

For further advice on building wealth, book a discovery chat with Geraint, our financial advisor.