Building wealth may seem like a daunting task to the average American. That is because the median American savings account has around $1,200 in it.
People who only have a small amount of savings may be wondering what the roadmap to riches is. Well, two things that you can use are real estate investment strategies and stock trading strategies.
Do you want to start building wealth through real estate? What about learning a stock investment strategy?
This guide will teach you how to grow wealth with both.
Grow Your Savings
The first thing you need to do whether you want to use stock option strategies or real estate investment strategies is to grow your savings. The reason why this is so crucial is that, for both of these things, you are going to need as much money to play with as possible to maximize your profits.
Using basic math, you can figure out pretty quickly that if you are only putting minimal money into these investments, you are not going to earn life-changing money unless you get an insane return.
For example, let’s say that you get a 1000% return from a real estate marketing strategy or a stock investment strategy. While this is a fantastic return on paper, the initial investment will determine if you can retire after that type of return.
If you put $10,000 into it initially, you will receive $100,000. While that is great, that is not going to allow you to build true wealth.
However, if you put $100,000 into this initially and got that type of return, you would be much closer to retiring from your wealth.
Think about how much money you would need to consider yourself wealthy. Then, think about how long it will take you to build up enough wealth to make a worthwhile investment. This can help you start to develop goals and a timeline to make bigger moves and develop wealth creation strategies.
Diversify Your Stocks
One of the biggest stock option strategies you can use is diversifying your stock. When you do this, you minimize your risk of losing money because your entire portfolio will not blow up if one of your investments goes under.
This is especially crucial if you elect to invest in riskier stocks. These are usually unknown or have a poor track record. So, you are taking a bigger gamble that these stocks will turn around.
It helps to hedge your bets here in case one or more of these risky stocks do not pan out. Also, if you are just hoping for one of these stock options to get you a payday, it could help improve your odds of this happening if you diversify your stock options.
Buy Low, Sell High
Going off of the above, the top stock trading strategies almost always involve buying a stock while it still has a low value. For the above reasons, you have to be comfortable with taking a risk if you want wealth creation strategies like this to work.
The reason why this is so important is that if you stick to a common stock that everybody else has, it is much less likely to have significant movement from its current position.
Sure, you may find a stock that gives you a reliable percentage increase every year. Typically, this may be around 5%. However, a 5% increase is not going to allow you to build wealth.
If you want to know the key to how to grow wealth, it is investing in something that has a chance to have a much bigger return.
In the first section, we mentioned trying to get involved in an investment that could have a huge return such as 1000%. Finding something with this capability that is still considered a hidden gem could be the key for you to get rich.
If you want more proof that this can work, 73% more families in the top 10% of wealth own stocks than families in the bottom 25% of wealth.
Renting Out Property
When it comes to building wealth through real estate, one of the best real estate investment strategies you can use is to find a property that you can easily rent to someone else.
Ideally, this can be an apartment building where you will find long-term tenants or a house in a tourist area where you will primarily focus on short-term rentals.
What can this do for you? It can give you passive income while getting other people to pay off the mortgage that you will initially have to get with this property.
On top of this, if you invest in the right area, you could keep that demand up for decades to come or as long as you want to rent out the property.
Let’s say that you found property in Nashville about 15 years ago. Now, you would not only continue that demand but also have more demand than ever before.
Finding the right market can accelerate this process and owning property is one of the best ways to build wealth.
Take the Roadmap to Riches
These are some tips that you can use on your roadmap to riches. Whether you want to use a real estate marketing strategy, stock option strategy, or a combination of both, these are two of your best options to take on your roadmap to riches.
Just remember that for both options, you need some sort of savings for your initial investment and not be afraid to take some risk.
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