There is only one way to increase existing wealth. This way is for a person to put existing capital in a money growth vehicle. The only money growth vehicle that exists is the investment vehicle. Investment vehicles are financial vehicles that have two separate capacities. First, there have the capacity to grow wealth and there also have the capacity to destroy wealth. What determines what there do to wealth is influenced by the stability of the investment market.
Investment markets are unstable because there are controlled by forces out of our control. If an investment vehicle returns invested capital with interest from an unstable investment market, money increases and wealth is preserved. If wealth is lost, money decreases and wealth dissipates. The increase or decrease in wealth is dependent on three factors. The first is where the money is invested. That is the investment vehicle an investor chooses.
The second is what guides investment decisions. That is what an investor is trying to achieve. And the third is the investment market. That is the level of stability of the market in which an investment operates. These three things are what determine the safety of wealth in an investment market. While investors can control their choice of investment vehicle and the reason for investing, they cannot control the market. The investment market will rise and fall regardless of what investors do. What determines whether wealth is preserved is the protection investors put in place now.
To protect oneself, investors need to take organized actions that are congruent with wealth preservation goals. The worst thing investors can do is to make random and erratic decisions in an unstable market. It is like acting out of control on a risky and unsafe road. When you find yourself on a risky road you need coordination, concentration, and the right knowledge to survive. If you are disorganized and spontaneous in your actions chances are high you will get hurt. Achieving safety in an unsafe environment is therefore not about the risk in the environment. But your ability to remain grounded, maintain coordination and be prepared. As long as you conduct yourself in ways that are in agreement with safety, you will be safe. The unstable investment environment operates the exact same way. The market is risky and will be risky no matter what you do. It is your ability to get the right knowledge and take the right actions that will guarantee your safety. Trying to beat or outsmart the market is a fool’s game. Investor’s focus should be on developing the right attitudes for safety in an unsafe investment market. To protect shelter and grow wealth in a wildly random investment market Investors need to do three things. First, they need to set clear goals. Second, they need to invest based on their goals. Third, they need to align their actions and decisions with their desired goals. These are the three things investors must do to ensure the long-term stability of wealth in an unstable investment market. Below are more details about these three things.
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First, Investors must set clear goals. Investing without a clear goal is like going into the investment world blindfolded with large amounts of cash. Money is lost and wealth is dissipated. It is simply committing financial suicide. Goals are like a compass that guides investors in their investment decisions and is critical for investing success. While many investors have an idea of their goals, it is not hard to see that most goals are not in agreement with an investor’s purpose and objectives. Setting clear goals means understanding the purpose of investing and the most appropriate investment vehicle to use. Setting clear goals also means understanding what investing success means to you. Although tradition measurement ties investing success to financial returns, this is not entirely accurate. Financial returns can rise and fall depending on market conditions. Tying investing success to financial returns makes investor’s wealth unstable, fragile and unpredictable. True investing success is measured by achieving high financial stability through the fulfillment of important goals. That is the ability of investors to remain resilient in the face of dwindling market conditions. To maintain financial stability, investors must focus on three goals. The first goal is personal protection goals. The second goals are growth goals and the third goal are aspirational goals. Personal protection goals are goals that give investors financial stability. There are goals that ensure that investors stay grounded regardless of turbulent market conditions. A personal protection goal reduces the personal impact an investor experience due to varying market conditions. It focuses on protecting the investor from the impact of the volatile investment market. For example, if a house is hit by the external impact of windy and stormy rain. What determines whether it stands or falls is the internal impact that it feels. If the house is already designed to absorb the shock of the external impact the house will stand, otherwise, it will fall. The purpose of the personal protection goal is to help investors create a solid protection structure that can withstand the shock of the stormy investment market. If an investor’s wealth can be wiped out by the storm, it is proof investor’s protection system is deficient. Wise Investors focus on building financial stability that stands the test of time.
Second, Investors must choose investment vehicles that match their investment goals. Choosing investment vehicles based on goals is the only way to make sure investments achieves their objectives. When investment vehicles align with goals, they produce the right result and return wealth with profit. The fastest way to lose and tie-down money is to invest in the wrong investment vehicle.
Third, investors must make decisions and take actions that help them achieve their investment goals. Succeeding in the investment world has more to do with the conduct and attitude of the investor than anything else. One of the greatest mistakes most investors make is to conduct themselves in ways that cancel their investment efforts. Investing this way thwart the achievement of goals and exposes an investor to the exploitation of the market. If Investors must succeed in increasing their wealth they must take actions that are aligned with their goals. These three things are what investors need to thrive in an unstable investment market.
The principles of goal-based investing are simple and straightforward but there are not easy. There are not easy because they cut against human nature. While human nature seeks to follow the crowd, bend to peer pressure and invest to prove a point. Goal-based investing follows a disciplined and organized approach that increases personal wealth stability. Investors must find ways to balance their desire to show off with their desire to increase wealth on a long term basis. For investors to thrive in the investment market they must adopt the goal-based investing strategy.
The goal-based Investing strategy is goal-driven. It focuses on helping investors achieve financial stability rather than trying to beat the market. It defines investing success based on investor’s goals rather than financial returns. It creates a disciplined and organized approach to grow wealth rather than random acts of investing. This is the only way to enlarge wealth, stay safe. Enjoy peace of mind and control one’s destiny in an unstable investment market.
To discover how we can help you enlarge your wealth using the goal-based investing method send an email to [email protected].
is a Generational Wealth Advisor, Legacy Expert and Author of the popular Solid Wealth Book. She is a Consultant and Coach to an exclusive list of top executives and entrepreneurial clients running Businesses from $1-million to $1 billion in size. She help Affluent clients prepare and execute a Ten Generation Wealth Legacy, Diagnostic Family meetings, Family Business Succession, Family Bank Systems, 90 days Sudden death contingency plan, Next generation grooming, and second opinion review of existing Trust and Estate Plans to support generational wealth goals
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