There's always an infomercial on promising quick riches overnight, but most people who are serious about money know that obtaining and growing wealth requires patience and time. If you want to get serious about growing your current wealth, you may need to change some of your current habits. Here are some tips to keep in mind that can help you grow and also preserve your wealth over time.
What Is the Opportunity Cost of This Purchase?
Compound interest can take a small amount of money today and turn it into a much larger amount of money over time. Thanks to the power of compound interest, that small amount you put into your investment account today will continue to reap higher and higher rewards, provided you are patient and give your wealth the time it needs to grow. One way to think about this would be to figure out how much any given amount of money might be in 20 or 30 years at a certain interest rate. Investor.gov has a compound interest calculator for this purpose.
Using this calculator, you can see that $50 today could turn into more than $3,000 in cash if allowed to grow at a 15 percent interest rate compounded annually for 30 years. That's with no additional monthly investment — just the initial $50 investment plus the compounded annual rate. So if you are thinking about blowing 50 bucks on something you don't really need, think about the opportunity cost of what you could be giving up in the future.
Know When to Cut Your Losses
Sometimes long-term investors get so caught up in playing the long game though that they stay on a sinking ship. Yes, you want to have patience and not panic when an investment has a down year, but if you have investments that are losing money year after year, it might be time to have a professional look at your portfolio. Knowing when to say enough is enough, take your remaining money out of a failed investment, and put it back in towards a better option is also key to long-term growth.
Contact a Wealth Management Planning Professional
If you feel like you aren't getting enough out of your portfollio or you've suffered losses lately, it's time to reach out to someone who can help. A wealth management planning advisor can help you get back on track and start moving towards the retirement you deserveShare