What's the best wealth building investment right now? I get that question all the time and I laugh. What’s good? What is on a hot streak? There are lots of investment products out there that can build wealth and people treat these things like shiny new objects to pick off the shelf.
The Carrot StickEvery investment will have some sort of risk, some range of return, some tax implication, and some expense associated with it, and more. Sounds complicated? It is! But when you come from a perspective of looking at these things on the shelf and comparing them to each other, you come from a sense of poverty. You immediately assume that you are lacking something- whether it is a higher return on your money or a feature you like, or whatever it is that attracted you to that in the first place.
Each shiny object on the shelf tells you of something that you need or want or have to have. It could be a higher return or a tax feature or a safety element or a low expense ratio. But that doesn’t matter. What matters is that you are looking for investments to build your wealth through the perspective of not having what they offer. No wonder you feel confused! Everything looks attractive and you want them all but you can’t afford them, so you ask friends and relatives and read the paper and listen to television anchors for financial advice.
What you get will be advice for things that worked for your friends- their situation, their tax bracket, or you will get people trying to sell you stuff in which they get a commission. In other words, your need to choose and compare investments will be clouded by other people’s judgment and conflicts of interest. Sounds familiar? It is no coincidence that so many people have gotten burned with financial advice that was given by close friends and commissioned based sales people (remember your first experience buying a car? Ugh!) .
We want someone to help us and we figure if it worked for Warren Buffett, or our rich buddy on the golf course, then it is good enough for us. We don’t have to do any due diligence because it obviously must be good. This strategy usually doesn’t end well- just look at all the friends and families that invested in Bernie Madoff.
The Right ApproachIn order to build wealth for ourselves and our families, we must take a bigger perspective. We must come from opening the lens to acknowledge the existing wealth that we have. When you can honestly acknowledge what we have, then we can see what we need to accompany what already exists. In other words, your investment decisions will become much clearer and easy because you come from a perspective of abundance- not poverty. With this approach you can begin to open to what your true needs are to choose the right investments at the right time to enhance what you already have. This clarity makes your personal finance life much smoother and less stressful.
You can now concentrate on exactly what your needs are because you have insight into what you have more than what you lack. That perspective is the one of abundance and wealth. This is what you need to cultivate in order to pick the right investments that suit your tax bracket, your risk tolerance, and your needs and goals. Focus on your wealth- however big or small, and you will drawn easily to the right choices.