Investing Slow, Smart, and Strategically To Become a Millionaire! YES YOU CAN!
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
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Investing Slow, Smart, and Strategically – Wins Every Time!
The Tortoise and the Hare tale exemplifies human nature’s choices regarding money management and investing strategies. Warren Buffett invests like a tortoise and has a net worth of more than $100 Billion.
HARE INVESTMENT STYLE
These individuals have zero patience; they want wealth now! Their motto: Ready—Fire (buy)—Aim – OH SHIT!
Most of their hare-brained picks fail time and time again, forcing them to start over. He reads about these crypto billionaires, buying real estate with zero down, currency trading, and endless ways to put your money into someone else’s pocket. He eagerly listens to his barber offering investment advice, often falling prey to trends and tips without researching. If your barber were an excellent investor, he would spend his time on your hair!
“Fear of Missing Out” (FOMO) pushes him into high-risk investments that promise hard-to-believe {IMPOSSIBLE} returns in the hopes of striking it rich.
If an investment promises returns you know are unbelievable – RUN!
Investing Like Warren “The Tortoise” Buffett
One of the fundamental principles that the Tortoise exemplifies is living below her means. Rather than attempting to impress your neighbor, the Tortoise consistently spends less than she earns. This mentality fosters solid financial discipline, enabling her to set aside savings regularly.
This approach is not merely about frugality; it’s about making intentional choices regarding spending. The Tortoise understands the importance of budgeting and tracking expenses. The goal isn’t to deprive herself but rather to prioritize her financial health for the long term. By carefully managing her expenditures, she can save and invest. The Tortoise makes the time to build her financial and investment competency and only invests her hard-earned savings when she has carefully researched the investment. Tip- Give up some social media time and replace it with a plan to grow your financial literacy. Read blogs like this and better. Listen to podcasts, etc. Today, there are mountains of free materials.
A systematic approach to saving and investing leads to substantial financial growth over time.
HARE’S ANONYMOUS MEETINGS – This TUESDAY!
I evolved from a hare, constantly making dumb investments. I eventually started building my financial and economic literacy by reading, listening to wise investors, taking classes, etc. I transformed into a tortoise.
Building Savings
The Tortoise sets a target savings percentage, diligently working up to 20% over time. Aiming to save at least 20% of income is a powerful strategy that accelerating wealth accumulation. For some of us, saving 20% seems impossible. You build that one percent at a time!
This strategy fosters healthy saving habits and encourages you to focus on long-term financial goals like retirement, purchasing a home, or even funding your kid’s education. Over time, as income increases, the Tortoise adjusts her budget and allocates the growing difference toward savings and investments, reinforcing her commitment to financial wellness.
Intelligent Use of Retirement Accounts
At a minimum, she contributes the percentage her employer matches to her 401 (k), never turning down free money, and ultimately maximizes her contributions over time as her salary grows. This strategy is particularly effective because it benefits from employer contributions and tax advantages.
The Tortoise’s consistent contributions help her realize the power of compound interest. The earlier she starts, the more time her investments grow. By using a 401(k) wisely, she takes advantage of tax-deferred growth, allowing her investments to compound without the drag of yearly taxes on earnings.
ROTH IRA: A Smart Supplement
In addition to her 401(k), the Tortoise diversifies her retirement strategy with a Roth IRA. This account allows her to invest post-tax dollars, and the benefits become evident during retirement when her withdrawals are tax-free.
The growth of a Roth IRA over time is a testament to patience and perseverance. The Tortoise consistently contributes to her Roth IRA, slowly building her retirement savings with a mindset oriented around long-term potential. This strategy is financially sound and aligned with her values of saving and planning for the future.
Educational Savings Accounts: Planning for the Next Generation
While focusing on her financial future, the Tortoise considers her family’s education. She uses Education Savings Accounts (ESAs) to set aside funds for her children’s education. These accounts often offer tax advantages, which can significantly alleviate the cost burden of higher education.
The Tortoise understands that investing in education is an investment in her children’s future. She starts saving early, ensuring her children can pursue their academic dreams without accumulating overwhelming student debt. This foresight showcases her commitment not just to her financial growth but also to the future success of her family.
The Impact of Time: Building Net Worth
Investing like a tortoise is ultimately about leveraging the power of time. When the Tortoise commits to her savings and investment strategies, she allows her wealth to accumulate steadily over the years and decades. By adhering to her disciplined approach, she steadily builds her net worth.
The key is consistency; the Tortoise crosses each financial milestone—homeownership, sending her kids to college, or a well-earned retirement! Paris anyone?
The paths to financial freedom are UNLIMITED. CHOOSE YOUR OWN!
LET’S MAKE SOME MONEY – CRYPTOCURRENCY, ANYONE?
WHAT SUBJECTS DO YOU WANT TO READ NEXT? WHAT QUESTIONS CAN I ANSWER? UNTIL NEXT TIME!
YOUR GREATNESS IS NOT WHAT YOU HAVE; IT’S WHAT YOU GIVE! – SOME CHARITIES I SUPPORT
St Jude Hospital: The mission of St. Jude Children’s Research Hospital is to advance cures and means of prevention for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder, Danny Thomas, no child is denied treatment based on race, religion, or a family’s ability to pay.https://www.stjude.org/
Wounded Warrior Project: An American charity and veterans service organization that offers a variety of programs, services and events for wounded veterans of the military https://www.woundedwarriorproject.org
Folds of Honor: Providing life-changing scholarships to the spouses and children of America’s fallen or disabled military. And now, our mission expands to the families of America’s first responders. On our watch, those who protect our freedoms and our families will know they are not forgotten. https://foldsofhonor.org
Wilson’s No-Kill Animal Shelter: A N0-Kill shelter that is a top-rated non-profit. They compassionatelycare for all their animals. https://wcnkas.org
Tunnel To Towers: Since 9/11, we have been helping America’s heroes by providing mortgage-free homes to Gold Star and fallen first responder families with young children and by building specially adapted smart homes for catastrophically injured veterans and first responders. We are also committed to eradicating veteran homelessness and helping America to Never Forget September 11, 2001. https://dogood.t2t.org/give/320847/#!/donation/checkout
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THE ONE BOOK YOU SHOULD READ…….
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FINANCIAL LITERACY IS JUST NOT THAT COMPLICATED – TRUST ME!
https://wealthbuildingpowers.com/2019/04/01/financial-literacy-is-just-not-that-complicated-trust-me/
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, and real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
