Welcome to the world of financial literacy! Making sound financial decisions is a crucial part of achieving financial success. It requires a deep understanding of your financial goals, risk tolerance, and investment strategy. One example of a good financial decision is investing in a diversified portfolio of low-cost index funds. This approach allows you to benefit from the overall growth of the market while minimizing the impact of individual stock performance. Additionally, it helps to minimize risk by spreading your investments across multiple asset classes. In this article, we will explore the concept of making sound financial decisions and how it can help you maximize your wealth over time.
Understanding Your Financial Goals
Identifying Your Financial Objectives
- Setting financial goals
- Defining what you want to achieve with your money
- Establishing a timeline for your goals
- Assessing your current financial situation
- Creating a financial plan
- Determining your income and expenses
- Identifying areas where you can reduce expenses
- Establishing a budget and sticking to it
- Allocating your savings towards your financial goals
- Reviewing and adjusting your plan regularly
Identifying your financial objectives is a crucial step in creating a financial plan that will help you maximize your wealth. By setting financial goals, you can focus your efforts and resources on achieving specific outcomes, such as saving for a down payment on a house or building an emergency fund. It is important to define what you want to achieve with your money, and establish a timeline for your goals. This will help you prioritize your financial goals and determine the steps you need to take to achieve them.
In addition to setting financial goals, it is important to assess your current financial situation. This includes taking stock of your income, expenses, assets, and liabilities. By understanding your current financial position, you can identify areas where you can reduce expenses and allocate your savings towards your financial goals.
Creating a financial plan is also an essential part of identifying your financial objectives. This involves determining your income and expenses, and identifying areas where you can reduce expenses. By establishing a budget and sticking to it, you can allocate your savings towards your financial goals. It is important to regularly review and adjust your plan as your financial situation changes, to ensure that you are on track to achieve your goals.
In summary, identifying your financial objectives is a critical step in creating a financial plan that will help you maximize your wealth. By setting financial goals, assessing your current financial situation, and creating a financial plan, you can focus your efforts and resources on achieving specific outcomes, and work towards building a more secure financial future.
Assessing Your Financial Situation
When it comes to making sound financial decisions, it is crucial to start by assessing your current financial situation. This involves taking a close look at your income, expenses, and net worth. Here’s a deeper dive into each of these areas:
Analyzing your income
Your income is the first thing you need to analyze when assessing your financial situation. This includes your salary, bonuses, rental income, and any other sources of income you may have. It’s important to take a realistic look at your income and consider any potential changes that may impact it in the future, such as a promotion or a new job.
Evaluating your expenses
Your expenses are the next area to evaluate. This includes all of your monthly bills, such as rent or mortgage payments, utilities, transportation costs, and groceries. It’s important to track your expenses over time to see where you can cut back and save money. Consider creating a budget to help you stay on track.
Determining your net worth
Your net worth is the final area to assess. This is the total value of your assets minus your liabilities. Your assets may include things like your home, investments, and savings accounts, while your liabilities may include things like credit card debt and student loans. By calculating your net worth, you can get a clear picture of your financial situation and identify areas where you may need to make changes to improve your financial health.
By taking the time to assess your financial situation, you can gain a better understanding of your current financial status and identify areas where you can make improvements. This will help you make sound financial decisions that will maximize your wealth over time.
Taking Stock of Your Financial Risks
- Identifying potential risks
- Assessing your risk tolerance
- Developing a risk management plan
Identifying Potential Risks
Before you can assess your risk tolerance and develop a risk management plan, it’s essential to identify potential risks that could impact your financial goals. These risks could include:
- Market risks: These are risks associated with fluctuations in the stock market, interest rates, and other economic factors that could affect your investments.
- Credit risks: These are risks associated with borrowing money, such as credit card debt or loans. If you’re unable to make your payments, your credit score could suffer, and you could end up in debt.
- Liquidity risks: These are risks associated with not having enough cash on hand to meet unexpected expenses or emergencies.
- Operational risks: These are risks associated with the day-to-day operations of your business, such as data breaches, cyber attacks, and other unexpected events.
Assessing Your Risk Tolerance
Once you’ve identified potential risks, it’s important to assess your risk tolerance. This is a measure of how much risk you’re willing to take on in pursuit of your financial goals. Your risk tolerance will depend on a variety of factors, including your age, investment horizon, and financial goals.
If you’re young and have a long investment horizon, you may be willing to take on more risk in pursuit of higher returns. On the other hand, if you’re nearing retirement or have a short investment horizon, you may be more risk-averse and prefer to invest in more conservative assets.
Developing a Risk Management Plan
Finally, it’s important to develop a risk management plan that takes into account your risk tolerance and potential risks. This plan should include strategies for mitigating risk, such as diversifying your investments, maintaining an emergency fund, and purchasing insurance.
By taking stock of your financial risks and developing a risk management plan, you can help ensure that you’re making sound financial decisions that will help you achieve your financial goals.
Establishing a Budget
Tracking your income and expenses
Establishing a budget is a crucial first step in maximizing your wealth. The first step in creating a budget is to track your income and expenses. This involves keeping a record of all the money that comes in and goes out of your household each month. This can be done manually by keeping a spreadsheet or using budgeting software. It is important to ensure that your income exceeds your expenses to maintain a positive cash flow.
Categorizing your expenses
Once you have tracked your income and expenses, the next step is to categorize your expenses. This involves grouping your expenses into categories such as housing, transportation, food, entertainment, and so on. This will help you to identify areas where you can cut back on expenses and reduce your overall spending.
Setting priorities for spending
After categorizing your expenses, the next step is to set priorities for spending. This involves determining which expenses are essential and which are discretionary. Essential expenses are those that are necessary for basic living such as housing, food, and transportation. Discretionary expenses are those that are not necessary but are nice to have such as entertainment, vacations, and hobbies. By setting priorities for spending, you can ensure that you are allocating your resources effectively and efficiently.
It is important to remember that creating and sticking to a budget requires discipline and commitment. It is easy to fall into the trap of overspending and neglecting your financial goals. However, by establishing a budget and sticking to it, you can take control of your finances and maximize your wealth over time.
Monitoring Your Progress
Regularly reviewing your financial plan is an essential part of achieving your financial goals. By monitoring your progress, you can stay on track and make any necessary adjustments to your budget. Here are some steps you can take to monitor your progress:
- Review Your Budget Regularly: Take the time to review your budget on a regular basis, such as monthly or quarterly. This will help you stay on top of your expenses and make sure you are sticking to your budget.
- Track Your Expenses: Keep track of your expenses to see where your money is going. This will help you identify areas where you may be overspending and make adjustments as needed.
- Set Milestones: Set milestones for yourself to help you stay motivated and on track. For example, if your goal is to save $10,000 in a year, set a milestone for every $1,000 you save.
- Celebrate Your Successes: Celebrate your successes along the way! Whether it’s saving a certain amount of money or paying off a debt, take the time to acknowledge your accomplishments and reward yourself for your hard work.
By following these steps, you can monitor your progress and stay on track towards achieving your financial goals. Remember, financial planning is not a one-time event, but an ongoing process that requires regular monitoring and adjustments.
Making Informed Investment Decisions
Understanding the Basics of Investing
Investing is a crucial aspect of building wealth over time. To make informed investment decisions, it is essential to understand the basics of investing. This section will cover the following topics:
Types of Investments
There are various types of investments available, each with its own risks and potential rewards. Some common types of investments include:
- Stocks: ownership in a company
- Bonds: debt securities that provide a fixed return
- Real estate: property investments
- Mutual funds: diversified portfolios of stocks, bonds, or other assets
- Cryptocurrencies: digital currencies that use cryptography for security
Risk and Return
Investing involves risk, and the potential return on an investment depends on the level of risk involved. Generally, investments with higher potential returns also come with higher levels of risk. Understanding the relationship between risk and return is critical when making investment decisions.
Diversification is the practice of spreading investments across different asset classes to reduce risk. By diversifying, investors can reduce the impact of any single investment on their overall portfolio. A well-diversified portfolio can help investors achieve their financial goals while minimizing risk.
In order to make informed investment decisions, it is essential to conduct thorough research on potential investments. This research should include gathering information on the investment, analyzing financial statements, and evaluating market trends.
- Gathering Information on Investments
Before making any investment, it is crucial to gather as much information as possible about the investment. This includes understanding the company’s business model, industry, competitors, and growth prospects. It is also important to consider the investment’s historical performance and the risks associated with it.
- Analyzing Financial Statements
Once you have gathered information on the investment, the next step is to analyze its financial statements. This includes examining the company’s income statement, balance sheet, and cash flow statement. By analyzing these statements, you can gain insight into the company’s financial health, profitability, and liquidity.
- Evaluating Market Trends
Finally, it is important to evaluate market trends when conducting research on investments. This includes analyzing economic indicators, such as GDP growth and inflation rates, as well as monitoring industry-specific trends. By staying up-to-date on market trends, you can gain a better understanding of the overall economic environment and how it may impact your investment.
Overall, conducting thorough research is crucial to making informed investment decisions. By gathering information on investments, analyzing financial statements, and evaluating market trends, you can make informed decisions that are based on a comprehensive understanding of the investment and the broader economic environment.
Assessing Your Risk Tolerance
When it comes to investing, one of the most important factors to consider is your risk tolerance. Your risk tolerance refers to your willingness and ability to take on risk in pursuit of potential returns. Understanding your risk tolerance is crucial in developing a risk management strategy that aligns with your financial goals and objectives. Here are some key steps to help you assess your risk tolerance:
- Determine your risk comfort zone: Start by assessing your own feelings about risk. Consider your past experiences, your current financial situation, and your future goals. Are you comfortable taking on more risk for the potential of higher returns, or do you prefer a more conservative approach to investing? Understanding your own risk comfort zone can help you make informed decisions about your investment portfolio.
- Balancing risk and reward: It’s important to understand that all investments carry some level of risk, and there is no such thing as a risk-free investment. However, the potential returns on an investment are often directly related to the level of risk involved. When assessing your risk tolerance, it’s important to consider how much risk you are willing to take on in pursuit of potential returns. For example, are you willing to take on more risk for the potential of higher returns, or are you more comfortable with a lower risk investment that offers more modest returns?
- Developing a risk management strategy: Once you have a clear understanding of your risk tolerance, you can develop a risk management strategy that aligns with your financial goals and objectives. This may involve diversifying your investment portfolio to reduce overall risk, or taking on more risk in pursuit of higher returns. It’s important to remember that your risk tolerance may change over time, so it’s important to regularly reassess your risk comfort zone and adjust your investment strategy as needed.
Diversifying Your Portfolio
When it comes to making informed investment decisions, diversifying your portfolio is a crucial step towards maximizing your wealth. Here’s why:
- Spreading your investments across different asset classes: Diversification involves spreading your investments across different asset classes, such as stocks, bonds, and real estate. By doing so, you can reduce the risk associated with any single investment and increase the stability of your overall portfolio.
- Investing in a mix of stocks, bonds, and other securities: Within each asset class, it’s important to invest in a mix of stocks, bonds, and other securities. For example, within the stock market, you might invest in large-cap, mid-cap, and small-cap stocks, as well as a mix of growth and value stocks. Similarly, within the bond market, you might invest in government bonds, corporate bonds, and high-yield bonds.
- Managing your portfolio over time: Finally, it’s important to manage your portfolio over time, regularly rebalancing your investments to ensure that your asset allocation remains in line with your investment goals. This might involve selling some investments that have performed well and buying more of those that have underperformed.
By diversifying your portfolio in this way, you can reduce the risk associated with any single investment and increase the stability of your overall portfolio, which can help you maximize your wealth over the long term.
Monitoring Your Investments
Effective investment management requires diligent monitoring of your investments to ensure they align with your financial goals and risk tolerance. Regular review of your portfolio can help you make informed decisions about potential adjustments to your investments.
- Regularly reviewing your portfolio: It is crucial to assess your investments periodically to evaluate their performance and ensure they remain aligned with your financial objectives. Regular reviews can help you identify underperforming assets, assess the appropriateness of your asset allocation, and make necessary adjustments to your portfolio.
- Adjusting your investments as needed: As your financial situation, risk tolerance, and investment goals evolve, it may be necessary to make adjustments to your investment portfolio. Regular reviews can help you identify areas where adjustments may be needed, such as rebalancing your portfolio to maintain the desired asset allocation or reallocating assets to better align with your financial goals.
- Staying informed about market conditions: Market conditions can have a significant impact on your investments, and staying informed about economic trends, interest rates, and other factors can help you make more informed investment decisions. By staying informed, you can be better prepared to adjust your investments as needed to take advantage of market opportunities or to protect your investments during periods of market volatility.
Overall, monitoring your investments is a critical component of effective investment management, as it allows you to make informed decisions about potential adjustments to your portfolio and ensure that your investments remain aligned with your financial goals and risk tolerance.
Building Wealth through Saving and Spending
Establishing a Savings Plan
Establishing a savings plan is an essential step towards building wealth. By setting aside a portion of your income and putting it towards savings, you can ensure that you have a financial cushion to fall back on in case of emergencies or unexpected expenses. Here are some key steps to help you establish a savings plan that works for you:
Setting savings goals
The first step in establishing a savings plan is to set clear and achievable goals. This could include saving for a down payment on a house, a new car, a dream vacation, or any other significant purchase. It’s important to make your goals specific and measurable, so you can track your progress and stay motivated.
Once you have established your savings goals, it’s essential to determine how much you need to save each month to achieve them. You can use a savings calculator to help you determine how much you need to save each month based on your goal and the expected rate of return on your investments.
Automating your savings
One of the most effective ways to save money is to automate your savings. This means setting up a system that automatically transfers a portion of your income into your savings account each month. This can help you stay on track and ensure that you are consistently saving towards your goals.
You can automate your savings by setting up a direct deposit from your paycheck into your savings account, or by setting up automatic transfers from your checking account into your savings account. It’s also a good idea to set up alerts or reminders to help you stay on top of your savings goals.
Determining the best savings vehicles for your needs
Once you have established your savings goals and automated your savings, it’s time to determine the best savings vehicles for your needs. This could include high-yield savings accounts, certificates of deposit (CDs), mutual funds, or other investment vehicles.
When choosing a savings vehicle, it’s important to consider factors such as interest rates, fees, and investment risks. You may want to consult with a financial advisor or do your research to determine the best savings vehicles for your specific needs and goals.
In conclusion, establishing a savings plan is a crucial step towards building wealth. By setting clear goals, automating your savings, and determining the best savings vehicles for your needs, you can ensure that you are on track to achieve your financial goals and maximize your wealth over time.
Making Smart Spending Decisions
Making smart spending decisions is a crucial aspect of building wealth. Here are some tips to help you make better spending decisions:
- Prioritize your spending: To make smart spending decisions, it’s essential to prioritize your expenses. Identify your needs and wants and allocate your budget accordingly. For instance, you should prioritize essential expenses such as housing, food, and transportation before spending money on non-essential items.
- Avoid impulse purchases: Impulse purchases can be detrimental to your financial goals. They can cause you to overspend and leave you with little money to save or invest. To avoid impulse purchases, take time to think about your purchases before making them. Ask yourself if the item is necessary or if it’s just a want.
- Shop smart and avoid unnecessary expenses: Shopping smart can help you save money and avoid unnecessary expenses. One way to shop smart is to compare prices and look for discounts or deals. You can also buy in bulk to save money on groceries and other essentials. Additionally, try to avoid unnecessary expenses such as eating out frequently or buying expensive coffee drinks.
By following these tips, you can make smart spending decisions that will help you build wealth over time.
Planning for Major Purchases
When it comes to making sound financial decisions, planning for major purchases is an essential aspect. This includes setting aside funds for large purchases, avoiding high-interest debt, and evaluating the true cost of borrowing.
Setting aside funds for large purchases
One of the most effective ways to plan for major purchases is to set aside funds in advance. This means creating a budget and allocating a portion of your income towards a specific savings account that is dedicated to covering the cost of your future purchases.
To effectively set aside funds for major purchases, it is important to have a clear understanding of how much you need to save, how long it will take to reach your goal, and what other expenses you need to consider. It is also essential to have a clear timeline for your savings plan and to stick to it.
Avoiding high-interest debt
Another important aspect of planning for major purchases is to avoid high-interest debt. This means that instead of taking out a loan or using a credit card to finance your purchase, you should aim to pay for it in cash. This way, you can avoid paying interest on the money you borrow, which can significantly impact your finances in the long run.
However, if you find yourself in a situation where you need to take out a loan, it is important to evaluate the true cost of borrowing. This includes understanding the interest rate, the repayment terms, and any fees or charges associated with the loan. By carefully considering these factors, you can make an informed decision about whether taking out a loan is the right choice for you.
Evaluating the true cost of borrowing
When it comes to borrowing money, it is important to evaluate the true cost of borrowing. This includes understanding the interest rate, the repayment terms, and any fees or charges associated with the loan. By carefully considering these factors, you can make an informed decision about whether taking out a loan is the right choice for you.
It is also important to understand the impact that borrowing money can have on your credit score. If you take out a loan and are unable to make your payments on time, your credit score may be negatively impacted. This can make it more difficult for you to obtain credit in the future, which can impact your ability to make major purchases.
In conclusion, planning for major purchases is an essential aspect of making sound financial decisions. This includes setting aside funds in advance, avoiding high-interest debt, and evaluating the true cost of borrowing. By carefully considering these factors, you can make informed decisions that will help you build wealth and achieve your financial goals.
Protecting Your Wealth
Understanding Insurance Needs
When it comes to protecting your wealth, understanding your insurance needs is crucial. This means assessing the potential risks and vulnerabilities that could threaten your financial well-being, and determining the level of coverage required to mitigate these risks. For example, if you own a home, you may need to purchase homeowners insurance to protect against damage or loss. Similarly, if you have a car, you may need to purchase auto insurance to protect against accidents or theft.
Purchasing Appropriate Coverage
Once you have identified your insurance needs, the next step is to purchase appropriate coverage. This means selecting the right insurance policies and coverage limits to protect your assets and financial investments. It is important to carefully review and compare different insurance policies to ensure that you are getting the best coverage at a reasonable cost. Additionally, you should review your policies regularly to ensure that they continue to meet your needs as your circumstances change.
Planning for Unexpected Events
Finally, it is important to plan for unexpected events that could impact your financial well-being. This means creating an emergency fund to cover unexpected expenses such as medical bills, car repairs, or home repairs. It is recommended to have at least three to six months’ worth of living expenses set aside in an easily accessible savings account. Additionally, you should consider creating a will or trust to ensure that your assets are distributed according to your wishes in the event of your death.
Seeking Professional Advice
Understanding the Benefits of Professional Advice
One of the key benefits of seeking professional advice when it comes to managing your finances is the ability to access expertise and knowledge that may be beyond your own capabilities. Financial professionals have extensive training and experience in various aspects of personal finance, including investment management, tax planning, retirement planning, and estate planning. They can provide valuable insights and strategies that can help you achieve your financial goals more effectively.
Another benefit of seeking professional advice is gaining perspective on your financial situation. A financial professional can help you assess your current financial situation, identify areas of strength and weakness, and develop a comprehensive financial plan that is tailored to your specific needs and goals. They can also help you identify potential risks and challenges that may arise, and develop strategies to mitigate those risks.
In addition to expertise and perspective, seeking professional advice can also provide you with unbiased advice. Financial professionals are not beholden to any particular financial institution or product, and are not motivated by commissions or other incentives. They are focused solely on helping you achieve your financial goals, and can provide unbiased recommendations that are in your best interest.
Overall, seeking professional advice can provide you with the expertise, perspective, and unbiased guidance that you need to make sound financial decisions and maximize your wealth over the long term.
Finding the Right Financial Advisor
Identifying your needs
Before you embark on the journey of finding the right financial advisor, it is essential to identify your needs. What are your financial goals? Are you looking for someone to help you with retirement planning, investment management, or estate planning? Identifying your needs will help you narrow down your search and find an advisor who specializes in your area of interest.
Once you have identified your needs, the next step is to conduct research. Start by asking for referrals from friends, family members, or colleagues who have worked with financial advisors. You can also search online for financial advisor directories or look for articles and reviews on various financial websites. Make sure to read reviews and check the credentials of the advisors you are considering.
Interviewing potential advisors
After you have narrowed down your search, it is time to interview potential advisors. During the interview, ask questions about their experience, qualifications, and fee structure. It is also essential to find out if they have any conflicts of interest that could affect their advice. Be wary of advisors who pressure you into making quick decisions or who guarantee high returns.
Remember, finding the right financial advisor is a crucial step in maximizing your wealth. Take your time, do your research, and interview several advisors before making a decision.
Establishing a Working Relationship with Your Advisor
When seeking professional advice for your financial decisions, it is important to establish a working relationship with your advisor that is built on trust, clear communication, and mutual understanding. Here are some key steps to help you establish a successful working relationship with your financial advisor:
- Be clear about your financial goals and objectives.
- Discuss your risk tolerance and investment preferences.
- Define the scope of the engagement and the services to be provided.
- Be open and honest about your financial situation and any changes that may occur.
- Provide your advisor with all relevant information, including financial statements, tax returns, and investment reports.
- Keep regular communication channels open and schedule regular meetings to review your progress.
Monitoring Your Progress
- Regularly review your portfolio performance and financial status.
- Track your progress against your financial goals and objectives.
- Evaluate the effectiveness of the investment strategies recommended by your advisor.
By following these steps, you can establish a strong working relationship with your financial advisor and maximize your wealth through sound financial decision-making.
Evaluating Your Advisor’s Performance
When it comes to managing your finances, seeking professional advice can be a wise decision. However, it is crucial to evaluate your advisor’s performance regularly to ensure that you are getting the best possible advice. Here are some ways to measure your advisor’s success and make changes as needed.
Measuring your advisor’s success
One way to evaluate your advisor’s performance is to measure their success in achieving your financial goals. This includes evaluating the returns on your investments, the growth of your portfolio, and the overall performance of your financial plan. You should also consider the level of risk associated with your investments and whether your advisor has taken steps to manage that risk effectively.
Another way to measure your advisor’s success is to compare their performance to industry benchmarks. This can help you determine whether your advisor is providing you with above-average returns or whether you could be getting better results elsewhere. It is important to note that past performance is not always indicative of future results, so it is essential to evaluate your advisor’s performance over time.
Reviewing your progress
Regularly reviewing your progress towards your financial goals is another important step in evaluating your advisor’s performance. This includes reviewing your portfolio’s performance, your investment returns, and your overall financial plan. Your advisor should provide you with regular updates on your progress and make recommendations for any necessary adjustments to your financial plan.
It is also important to review your progress in relation to your financial goals. If you are not making progress towards your goals, it may be time to reevaluate your financial plan and consider making changes. Your advisor should be able to help you identify areas where you can improve and provide guidance on how to achieve your financial goals.
Making changes as needed
Finally, if you are not satisfied with your advisor’s performance, it may be time to make changes. This could include finding a new advisor, making changes to your financial plan, or adjusting your investment strategy. It is important to remember that financial planning is a long-term process, and making changes as needed can help you achieve your financial goals over time.
In summary, evaluating your advisor’s performance is an essential step in maximizing your wealth and making sound financial decisions. By measuring your advisor’s success, reviewing your progress, and making changes as needed, you can ensure that you are getting the best possible advice and on track to achieving your financial goals.
1. What is a good financial decision?
A good financial decision is one that is well-informed, carefully considered, and aligned with your long-term financial goals. It is a decision that balances risk and reward, takes into account your personal circumstances, and maximizes your wealth over time. Examples of good financial decisions include investing in a diversified portfolio of stocks and bonds, saving for retirement through a 401(k) or IRA, and purchasing a home that fits within your budget.
2. How can I make sound financial decisions?
Making sound financial decisions requires careful planning, research, and education. Start by setting clear financial goals and developing a budget that aligns with those goals. Educate yourself on different investment options and financial products, and consider seeking the advice of a financial advisor or professional. Take the time to research and compare different financial products and services, and be aware of fees and hidden costs. By making informed decisions and avoiding common financial pitfalls, you can maximize your wealth and achieve your financial goals.
3. What are some common financial mistakes to avoid?
Common financial mistakes include not saving enough for retirement, not diversifying investments, and taking on too much debt. Other mistakes include failing to plan for unexpected expenses, not monitoring spending and expenses, and not keeping track of your investments. Avoid impulsive spending and investing, and be wary of high-risk, high-return investments that may not be suitable for your financial situation. By avoiding these common mistakes, you can make sound financial decisions that will help you maximize your wealth over time.
4. How can I stay motivated to make good financial decisions?
Staying motivated to make good financial decisions requires discipline, patience, and a long-term perspective. Set clear financial goals and track your progress regularly. Reward yourself for meeting financial milestones, and stay focused on the long-term benefits of sound financial decision-making. Surround yourself with supportive friends and family who share your financial goals, and seek out resources and advice from financial experts. By staying motivated and focused on your financial goals, you can make good financial decisions that will help you maximize your wealth over time.