Creating Wealth

Wealth Secrets and Strategies
Here are the many points to consider when looking at creation of wealth and reduction of debt:

  • Borrow only for growing values.
  • Commit to growing wealth.
  • Create a wealth plan.
  • Don’t borrow if at all possible.
  • Never fight – try and negotiate.
  • Minimise tax at all times.
  • Learn the basics of investing.
  • Insure everything.
  • Make sure you have good financial advisers.
  • Get debt free quick and stay free.
  • Pay yourself first.
  • Protect your assets.
  • Save and save.
  • Watch compound interest.
  • Never guarantee anything.
  • Get computer literate and learn the Internet.
  • Make sure you keep good records.
  • Put in mortgage reduction, if you can.
  • Avoid legal problems. Keep out of court, if possible.
  • Structure your business to your best advantage.
  • Pay yourself first.
  • Reinvest surplus funds after loans are repaid.
  • Never sign without legal advice.
  • When investing, watch your timing.
  • Learn and understand the investment clock.
  • Always balance risk with the return.
  • Spread your risk by diversifying.
  • Check out overseas investments.
  • Look at dollar cost averaging.
  • Before investing, find out what your investment profile is.
  • If you are new to investing, try managed funds.
  • Be aware of your rights as a shareholder.
  • Keep good records and communication information with your broker or adviser.
  • Learn about trading online.
  • Periodically review your portfolio.
  • Watch out for contributing mortgages.
  • Keep an eye out for scams.
  • Know what to do if you bought a “bomb”.
  • Never, ever give up.

What about Dollar Cost Averaging?
The process of continuously investing a fixed amount of money into shares is called dollar cost averaging. Through dollar cost averaging you will end up buying more shares when stock is down and few when it’s up. For instance, if you are investing $400 per month in a stock, which is trading at $40 per share, you may buy 10 shares for the first time. If the next month the stock moves up to $50 per share, your regular purchase will net you only 8 shares. However, if the stock drops down to $28.57 you will end up with 14 shares.

Dollar cost averaging is a regular investment type mechanism, which harnesses the power of the dollar cost averaging principle. If you set aside a fixed amount every week from your wages to be put into shares soon you won’t miss that money at all. However, your investment funds will build and so you have compulsory saving as well as compulsory wealth growth.