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In prior tips, we have covered the first three steps to wealth accumulation:
In Step 1, we created a budget to see where we were financially.
In Step 2, we made modifications to our budget to find Power Money to fuel the system.
In Step 3, we began the process of eliminating debt to remove the biggest obstacle to obtaining wealth.
And here we are now, ready to invest our money in Step 4 with the goal of making at least a 10% average annual rate of return.
Of course we'd like to make more, but we also want to keep our risk down as low as possible. Higher returns usually encompass more risk. A 10% rate of return is plenty to accomplish our mission. There's no need to get greedy.
Investing one's money is a highly personal thing. Everyone has different goals and different levels of risk tolerance. An investment strategy that is good for one person may be unacceptable to another.
Our next tip will describe a "middle of the road" type approach to investing.
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