Ramsey Brock: 6 Reasons Building Wealth Is Far Easier Than You Make It Out to Be (and How to Get Started)
Building wealth is often thought of as a major challenge. And quite often, this mindset causes people to falsely assume that they would never be able to build wealth and achieve the lifestyle they desire.
However, this doesn’t have to be the case. I recently had the opportunity to speak with Ramsey Brock, president of Brock Asset Management, who revealed ways that building wealth can be easier and more straightforward than many people expect.
Here’s how building wealth can become easier than you might expect:
1. Successful Wealth Building Starts With a Plan
“A big part of the reason people think wealth building is so difficult is because they don’t know where to start,” Brock says. “In reality, the process of building wealth becomes much less daunting when they simply sit down and take the time to evaluate their current situation and then develop a plan based around their financial goals. A clear vision of what you want to achieve and how it compares to your current status will help you develop a strategy.”
These plans can be as varied as each individual. Common strategies Brock cites include budgeting to save money, seeking higher education to increase income or looking at investing opportunities. Flexible plans with a long-term focus tend to deliver the best results.
2. Many Resources to Learn From
One advantage today’s households have is a wealth of information to help them better understand financial topics. From equities based financing to estate planning, worthwhile information is readily available to help you better understand the topics that most closely influence your long-term financial goals.
Of course, readers must always carefully evaluate the sources they utilize to ensure they are getting trustworthy information. Look for industry professionals and other vetted sources, and avoid anyone who promises a get rich quick solution.
3. Wealth Building Starts With the Basics
“One of the most important things to understand with building wealth is that it doesn’t have to start with major financial moves,” Brock explains. “For most of us, it starts by focusing on basic financial principles, such as increasing your income and setting a budget. Something as simple as understanding where your money is coming from and how you are using it will help you gain actionable insights into what you can change to build lasting wealth, whether that be changing your employment status or finding ways to cut expenses.”
As part of this, Brock advises that households look for ways to pay down debt, especially high-interest debt. Eliminating debt is one of the best ways to improve individual net worth by decreasing financial liabilities.
4. You Can Start Saving a Little at a Time
As part of building wealth, you should regularly be adding money to a savings account (ideally, a high-yield savings account). Experts recommend that you have an emergency fund that can cover three to six months of living expenses. For many, the idea of saving up that money can feel daunting — but it’s important to remember you don’t have to do it all at once.
Instead, set aside a designated amount toward savings from each paycheck. Even if it is a small amount, making this a consistent habit will allow you to gradually build the value of your emergency account or save toward other financial goals that could increase your net worth (such as buying a home).
5. You Can Start Investing a Little at a Time
Similar to building a savings account, you can also start investing now, even if you don’t have a lot of money to invest. While you should have a basic understanding of investing principles (and understand the companies you invest in), investing can also be approached with a slow and steady mindset.
“The earlier you invest, the greater opportunities you have for long-term gains,” Brock says. “It’s better to invest $100 today and keep investing $100 each month rather than waiting until you have $1,000 to start investing. Steady, consistent investments in relatively conservative stocks or mutual funds generally see good returns over time. You don’t have to worry about trying to time the market. Just make it a habit that you will invest regularly, even if it’s just a small amount, so you can take advantage of compound interest.”
6. Wealth Building Is a Long-Term Process
Finally, Brock advises that anyone worried about building wealth remember that this is a long-term process.
“There’s no overnight solution for saving for retirement or achieving other financial goals,” he says. “It’s important to look at this as a marathon, not a sprint. By maintaining a long-term perspective you can avoid making emotional decisions so that you protect the wealth you’ve accumulated. Take things one step at a time, look at your plan and make adjustments when necessary.”
You Can Start Today
As Brock’s insights reveal, you can start building wealth today, no matter what your current financial situation looks like. By carefully evaluating your current situation, you can develop a plan that is tailored to your specific needs.
By subsequently implementing strategies like paying down debts, increasing your income and making consistent contributions to savings and investment accounts, you can put yourself on the path toward successful wealth accumulation.