If you ask the pros, growing your wealth isn’t about picking the next big stock, or getting a high-paying gig as a CEO, or inheriting a windfall.
According to certified financial planner Neal Frankle, the best thing you can do to increase your net worth is something anyone can do — and something anyone can start doing today.
“The absolute best advice I can provide for anyone who wants to start growing their net worth is to automate their deposits into their investment account,” Frankle tells Business Insider.
“By ‘paying yourself first’ you almost guarantee success. At least, you are much more likely to hit your savings goals compared to those who only invest if there is money left over at the end of the month.”
“People who approach investing that way typically don’t have money left over so they find it very hard to leave the starting block,” he explains. “Investing for the future should not be relegated [to the end of the list] — it should be a priority. By investing first and only spending what’s left over, you regulate your spending and put that money aside for your future thereby killing two birds with one stone. I can’t think of any better advice.”
By “investment accounts,” Frankle means anything from retirement funds to mutual funds. When asked by a friend’s son how to invest like a rich person, Frankle writes on his site Wealth Pilgrim that he advised setting up a diversified investment portfolio and setting aside money every month to devote to it.
“I work with lots of rich people — none of them made their money overnight,” Frankle writes. “They worked hard, didn’t do anything dumb and (most important) didn’t ever take undue risk. That means they didn’t waste time looking to make a killing.”
This article was written by Business Insider without the involvement of Merrill Lynch.
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