It’s the 200th post of the Fortrove newsletter! What a better way to celebrate than sharing three ways to get rich.
Thank you for reading! Your time is valuable and a few minutes of attention every week means a lot. 😀
Thoughts on Finances
Given that this is an informative post, I think a lot about how to help individuals make better money decisions that result in a more financially sound life.
At the risk of sounding like your parents, three ways to get rich is a straightforward plan. However, it’s the follow through and behavior to stick with your strategy that are challenging.
Three Ways to Get Rich
We will go through the three parts that are part of a solid plan. Two of the pieces are clear, and one of them is a little intangible and difficult to grasp.
Saving Money
The first part of the plan is don’t spend more than you make. This can be a very difficult undertaking, but it is the foundation upon which everything rests.
Different savings rates are appropriate for different people. It’s more saving for some and less for others. The amount you save all depends on what you want out of life.
Appropriate Portfolio
Once you start saving money, the second part is to invest most of it into a portfolio that suits your needs. This is where the strategy gets a little fuzzy. A portfolio that is appropriate for you, may not be appropriate for your best friend, etc.
Constructing a quiver of suitable investments takes time and dedication. It will also change as investments move in price, tax implications evolve, and you move through life.
The portfolio should not have too many positions or too few. Nor should you take on too much risk or too little risk.
What are the right investments for me you may be wondering? I can’t answer that because I don’t know the specifics of your financial situation. These are all very personal choices that take time to understand.
This is where working with a professional is very, very helpful. You will not only build a portfolio, but also help you understand your behavior with money.
Reduce Your Taxes
When it comes to your plan, it’s best to reduce your taxes as much as possible. Max out your 401(k), and / or contribute to an IRA.
Also, put frequently taxed investments into tax free or tax deferred accounts. In taxable accounts, place investments that aren’t taxed or have low taxes associated with them. Further, you can use strategies like tax loss harvesting.
When it comes to equity compensation, there are many strategies for options, RSUs, and other stock ownership. All of this information is quite long so we will continue with these strategies in a series of posts.
If you would like, I’m happy to chat with you about financial strategies and the three ways to get rich!