3 Steps to Successfully Build Wealth - Endeavor Wealth Advisors (2024)

FAQs

What are the three steps to build wealth? ›

Basically, to accumulate wealth over time, you need to do just three things: (1) Make money, (2) save money, and (3) invest money. This article looks at each step in turn.

Key Takeaways

Building wealth over time requires an understanding of how to invest wisely, safeguard assets, and manage debt.

Sixty% of wealth transfers are lost by the second generation, and 90% by the third. Only 10% of wealth passes beyond the third generation. The overall financial environment, income tax regulations, and estate tax laws fluctuate dramatically over a three-generation time-span.

Understanding how to create a realistic budget, track your spending, and set attainable savings goals are essential steps in the process. It can be overwhelming to take on all these tasks at once, but when broken down into smaller steps, money management success is achievable.

Why are values, time, and money our three pillars of financial planning? Let's explore.

This includes strategic and tactical steps to continually evaluate and improve four key financial indicators: cash flow, credit, customers, and collateral. We call these indicators the 4 C's.

Spend Less and Save More

However, it is the key to your financial success. Though it is boring, only by spending less and saving will help you through your wealth management process. To create wealth, you need to have surplus funds to invest. Simply exhausting your income and not saving is not going to make you rich.

The three paths to personal wealth are financial capability, asset acquisition, and mindset. Learn these three paths to wealth and you'll know the basics of wealth creation. While each comes with its own set of unique experiences and challenges, all three paths will take you there.

One of the key ways to build wealth fast -- and over the long term -- is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties.

What are the three wealth building steps? ›

Build an Investment Strategy

Building wealth is much more than saving money – it's about making your money work for you. That's where a solid investment strategy comes into play. Investing is your ticket to compound growth – it's how you turn your savings into a growing wealth pool.

Three of the main types of income are earned, passive and portfolio. Earned income includes wages, salary, tips and commissions. Passive or unearned income could come from rental properties, royalties and limited partnerships. Portfolio or investment income includes interest, dividends and capital gains on investments.

Being wealthy comes down to some combination of your net worth, spending level and expectations.