Building Wealth: A Wealth Building Strategy Is More Than Simply Diversifying Your Investments

Wealth - an abundance of values. Each of us determines what is or is not of value to us. He or she may not be wealthy even though they may have a great deal of money because they have no honor, no happiness.

I measure wealth not only by the numbers but by holding it up against my happiness level at any given time. Building wealth is fine, but most people assume you are interested in building wealth to become secure, stable, and happy in life.

Assuming you are happy, just not thrilled with your current portfolio returns, you should know that there is more to diversification beyond what the average person thinks is all you need to know.

With a successful wealth building strategy comes the understanding of what kinds of diversification offer you the protection you need from taking great losses in the short and long term.

"Wealth is when small efforts produce large results. Poverty is when large efforts produce small results."

Financial wealth involves the ownership of multiple money producing assets that flow to you, not money draining assets that flow from you.

Investing is a fundamental way to build financial wealth. The sooner you start to successfully invest the more opportunity your investments have to grow.

In order to build wealth there are four simple things you must do:

1) Control your spending.

2) Pay off debts that don't produce some form of income to you.

3) Create or acquire wealth building assets or income streams.

4) Acquire the knowledge to learn how to leverage your TIME and your ENERGY.

Try seeing "diversification" in an entirely different light. As an example, David Futrelle, Money Magazine, wrote a great piece on this entitled "Build Wealth in any Market."

In it he discusses that diversifying investments in your own country's stock market may not be diversified enough.

"More than half the world's stocks are traded outside the U.S. We think it makes sense to keep at least a quarter of your stock money in foreign equities." David Futrelle, Money Magazine, August 12 2004.

Futrelle goes on to give tips on diversification. This is a good exercise in building wealth in the unstable world of stock investing.

Additionally, think of how you can diversify the following sets of capital:

1) Human Capital (your job and career),

2) Physical Capital (your house and other possessions) and

3) Financial Capital (those stocks, bonds and cash).

All these components should work together in your wealth building portfolio.

Diversifying financial assets alone will not offer you enough protection without understanding what kind of diversity offers true protection against avoidable losses.

C.C. Collins is a Financial Planning Advisor and Author of "Scientific Wealth Strategies" at http://wealthscientist.com Find more information at http://www.networthpublishing.com

In The News:


pen paper and inkwell


cat break through


Building Wealth: Its An Inside Job ? Part 2

Let's quickly review the principles discussed in the first part... Read More

Investors - What Separates the Good Traders from the Bad Traders?

There are many forms of investing online. While I can... Read More

Get Rich Slowly

Is it hard to get rich? If you're young, not... Read More

Warren Buffet: Wisdom from the Worlds Richest Investor

In light of the dominant mindset overshadowing the market these... Read More

Super-charge Your Dream of Retiring Rich with the Roth 401K!

This retirement account is so new and unique that you... Read More

The Secrets of World Money Flows and A Simple Way to Understand Them

You can learn the secrets of world monetary flow if... Read More

Early Retirement The Dream of the Working Classes

Everyone dreams of early retirement. The idea of no longer... Read More

Simple Tips on Saving

Simple tips on saving can very often make quite a... Read More

The Parthenon Principle

Have you seen a picture of the Parthenon in Athens,... Read More

Trustees: Who Can You Trust?

Early in my legal career I represented two young women... Read More

The 9 Critical Steps To Success In Demolishing Your Money Worries For Good!

Articles on 'How to make money' come a dime-a-dozen. How... Read More

Prosperity

An ellipsis to your success is hidden in the word... Read More

7 Golden Rules to Financial Prosperity

Not Enough Money?I believe that most people haven't got enough... Read More

Thieves Continue to Pull Off the Biggest Heist in History?Until Now!

Imagine being able to steal untold millions of dollars in... Read More

Lesson 1 - Why Arent You Wealthy?

We will start the Financial Fitness System with the assumption... Read More

Wealth Building Tips: Manage Your Money

As someone who loves to shop, enjoys holidays and owns... Read More

Residual Income - The Myth

"Join our program and retire in 3 months..." yeah, right.We... Read More

Wealth And Your Net Worth

Most people know it's important to keep and organize all... Read More

Your Own Products Can Make You Rich

Although there are advantages to selling other people`s products and... Read More

The Wealthy Mindset

What is the difference between wealthy people and poor (even... Read More

The Predicament of the Newly Rich

They are the object of thinly disguised envy. They are... Read More

The 11 Best Money Saving Ideas of All Time - Part 1

At any time in history, no matter what the current... Read More

One Pipeline Is Worth A Thousand Paychecks

It is with great pleasure of having you here at... Read More

What Do You Mean By Diversity?

The word 'diversity' is a unique one. It can represent... Read More

WARNING: The Biggest Lie About Social Security

Like I said, If you are poor and on social... Read More

Principles to Ensure a Fantastic Financial Finish

Most people want to get to the end of their... Read More

What Are Your Beliefs About Money and Wealth?

What is your attitude towards having wealth? Do you believe... Read More

Self Improvement and Financial Security for the Future

Any successful person, or any anyone interested in self improvement... Read More

Turn That Fixed Rate Mortgage Into A Goldmine

When you purchased your home, you most likely got a... Read More

21 Secrets of Self Made Millionaires

Self-Made Millionaires are not smarter or better than you. They... Read More

Is Your Money Keeping Up With Inflation?

In today's unpredictable global economy, you obviously never know what... Read More

Asset Diversification Is NOT Boring?And Will Make You Money

OK, this article will start with the cheapest piece of... Read More

Could a Roth IRA be Better Than a 401(k)?

Very few people whom I know are familiar with the... Read More