There are many ways and strategies to build wealth. Most billionaires amassed their wealth through starting and growing their businesses. However, for most of us, building wealth involves effectively managing our income streams to create savings for investments.
Although the terms, income and wealth are used almost in similar contexts, they are not the same thing.
Income is the steady flow of money earned by an individual or household. It is typically used to pay expenses (e.g. bills, food, etc.) with the balance saved on a regular basis. Meanwhile, wealth is the value of assets owned by a household or an individual. These assets are often built from savings and/or investments.
Building Wealth Through Savings and Investments
Building wealth is akin to running a marathon as it requires patience and discipline. With this in mind, having a proper set of strategies to manage our income can help us to accumulate wealth over time.
Here are some ways to grow our wealth by effectively managing our income:
- Build up savings
- Invest wisely
- Align your portfolio to your investment profile
As our personal financial situations may evolve with time (e.g. approaching retirement), giving our investment portfolios an occasional tune-up may help to manage our risks well. In addition, market conditions may also alter the mix of our assets over time. Thus, periodic rebalancing of our portfolios can help to realign our investments in line with our objectives and risk tolerance.
Conclusion
In summary, building wealth entails managing our income well to accumulate savings and investing them in various assets over the long term. As a form of investment, unit trust funds provide a convenient and flexible avenue for investors to build their wealth.
This article is prepared solely for educational and awareness purposes and should not be construed as an offer or a solicitation of an offer to purchase or subscribe to products offered by Public Mutual. No representation or warranty is made by Public Mutual, nor is there acceptance of any responsibility or liability as to the accuracy, completeness or correctness of the information contained herein.
