9 Wealth Creation Principles Your Financial Advisor May Not Tell You

By Susan

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Last Updated: November 6, 2021

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Although engaging with a financial advisor might not be for everyone, entrusting your finances to a professional can pay off in a bigger number of ways.

With a financial advisor on your side, you'll have access to professional experience and insights that you won't find somewhere else. And if you engage a true specialist, they will assist you to increase your returns with tactics you aren't even aware of.

However, are financial advisors perfect? By any stretch of the imagination, no! 

 

9 Principles & Strategies to Build and Maintain Wealth That You Probably Won't Get From Your Financial Advisor

1. You must earn it

Most financial advisors won't tell you this, but to become wealthy and grow your fortune, you must first earn it.

You will not get to your destination and reach your goals unless you try to! When it comes to money, this is a no-brainer. You want money, right? Stand up and make it. Find a job. Take on a part-time job. Have a side hustle.

The basic thing if you want to increase your fortune and build wealth is you must work and earn. It is after you earn you can then think of savings and investments. So the ultimate and first step to building wealth is to increase your earning.

 

2. Create a multimillionaire mentality

There are many "poor-rich" people; such rich folks appear wealthy from the outside, but the same baubles that give the illusion of riches prevent these high earners from amassing and creating actual wealth.

There is a significant difference between big earners and the wealthy. What's the distinction? A frame of thinking, in short, the mindset. It all begins with realizing that no one cares as much about your money and your destiny as you — no one!

Whether you want to do it yourself or engage with a financial advisor, building real wealth begins with you being the CEO of your finances. This state of mind will push you to interest yourself in learning the principles of wealth creation and guidelines.

 

3. Payback all debts and stay out of debt

Financial advisors are responsible for assisting you in maximizing your resources while limiting risk.

This frequently implies they will not advise you to pay off credit card debt or vehicle loans, especially when you are right on track with your goals. This is not so because your financial advisor doesn't care, but debt management is not a major part of their jurisdiction. 

 

4. Put resources into your development.

Although financial advisors offer very important and correct answers to your financial questions, they are not an island of financial knowledge; they might be unaware of some investments and opportunities you can take to improve your financial life.

Most times, their focus is to make sure you maximize the investment offers you already made, not to suggest you new ones.

That is why personal development is one area where you must perform some independent research. This research sometimes will require that you put in some resources, do it! It will pay off in the long run, and this knowledge you've bought will help you in wealth creation.

 

5. Own or Invest in Real Estate

Real estate ownership or investment is a significant component of wealth building.

Several studies have found that persons who have their own houses have a substantially higher average net worth than those who rent. In 2001, a survey by the University of Toronto showed the average net worth of house owners in 1999 to be about $145,000, while house renters have an average net worth of about $2,000.

This is a 48 percent decrease from the average for renters and a 24 percent uptrend for owners compared to 1984, a 17 year period.  

It might be interesting to point out that there should be an expectation of a higher average net worth for owners than renters being why they can afford to buy or build a home, but the gains of owning a house show that correlation between owning a house and wealth is "cause and effect."

Owners gain leverage, which does not only raises the return rate on their mortgage down payment but also gives them equity in the future that they can use to invest in real estate.

Owning a house is also an indirect way to force yourself to save by each mortgage payment every month, which is, in turn, an equity acquisition. However, owning a home is not for everybody! It comes with responsibilities that not everyone can carry.

A good alternative to enjoying the wealth-building benefit of real estate without owning a house is to invest with a real estate company and get a commission. This is an easy way to add real estate to your portfolio.

From 1999 to 2018, real estate investment companies have returned 10 percent to investors annually, making them the most lucrative of all investment types within that period.

6. Take calculated, sensible risks occasionally

Having a twofold, fivefold, or tenfold return on investment from big tech, agriculture, lifestyle, etc., companies have the potential to deliver if purchased at the proper time but difficult to find, catch or achieve.

Nevertheless, having the right investment premise, study, and investing a tiny fraction, let's say 3% of your resources to well-calculated risks, can merit the possibility of hitting an incidental homer that supercharges your outcomes and make you wealthy.

 

7. Pay attention to your taxes

This is one easily ignored part of your finances that has the capacity to make you worse or better off.

Not all financial advisors will go to the work of reviewing your tax returns to ensure that they are efficient; you might need to do the work yourself.

This will give you insight on what to cut off, what to decrease, and what to do more, so aside from reducing your taxes, it also increases your revenue retention will, in turn, will give you more equity that can be invested in other areas to build wealth.

 

8. Have a long term mentality and improve your knowledge as time goes on

Let's use Warren Buffet as a reference. He wasn't a millionaire until 32 and needed another 20 years to be worth billions, at aged 60; why was that?

Well, wealth building and acquisition is a journey; it takes a while to see the effect of compound interest, and there is a need to consistently grow your knowledge as more opportunities show up while some become obsolete. Here are some tips to stay afloat with new investment opportunities: 

  • Be a part of an investment or financial group
  • Subscribe to channels, blogs, and newsletters that give you time to time news that keep your knowledge updated 
  • Have a mindset and set your decision-making principles, which you refine as you learn 

 

9. Choose the right partner

One significant rule in wealth building you very likely won't hear from a financial advisor is to choose the right spouse.

What is the reason for this? Because a wrong spouse may be of high significance to wealth building, divorce is the number one wealth destroyer. According to a recent study, divorce wipes off 75 percent of a person's net worth.

In building, a good pair can both earn, gather and together see their fortunes rise over time. The interest is always higher when the stake is high, and of course, when compounded over a stretch of time, wealth is built.

On the other hand, divorce can ruin people's finances, and aside from sharing assets equally, the cost of hiring a lawyer and reduced stake for investment returns are ways a wrong or right marriage can impact wealth creation and acquisition.

Photo by Pavel Danilyuk from Pexels

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