Top 10 Tips to Building Wealth

Einstein’s Equation for Ego = 1 / Knowledge

August 1st marked my 10-year anniversary in this profession, and I thought the equation above was fitting.

The deeper you dive into any field, the humbler you become, as you discover how much there is that you don’t know.

Top 10 Tips to Building Wealth:

1. Cash allows you to sleep at night, stay invested, and have fun – what is the point of having all of your money invested and never enjoying it?

2. The simplest equation for financial success: Automate 20% of income to investing, spend the rest guilt free

3. Have ownership in something: a business, real estate, stocks – no one rented their way to wealth

4. One of the top reasons for divorce? Money problems. Get on the same page financially with your spouse

5. Outward appearances of wealth are the quickest ways to not have wealth

6. Start early – The majority of your wealth will come from saving in the beginning – later, compounding interest does the heavy lifting for you

7. Before you’re well off, don’t put a lot of money into a depreciating asset, cars, boats, etc – buy assets first that will generate more money to buy these things

8. Your lifestyle never goes backwards, so be careful what you get used to. No one goes from a Lexus to a Honda or a $1mil house to a $500k house (unless you happened to marry some jerk named Tanner, then yes you will have to give up your Lexus)

9. Know your hourly rate and value your time – you can save $100 and do it yourself, but if it cost you an hour of your time and your hourly rate is $150 you lost money

10. Take care of your body – People will sacrifice their health to gain wealth, then spend their wealth regaining their health

Bonus Tips (if the above don’t work)

- Marry rich - Inherit - Win the lottery - Sue

The Bad & The Good:

Recession

If you want a simplified definition of recession, it is when GPD (Gross Domestic Product), or in layman’s terms the total market value of the goods and services in our economy, declines for 2 quarters in a row The 1st quarter of 2022 we saw a 1.6% decline and in the 2nd quarter we saw a 0.9% decline

Consumer Sentiment Index (CSI) hit it’s lowest level in 40 years What is it? CSI is consumer’s attitudes on the business climate, personal finance, and spending or in short economic optimism or pessimism Consumers feel worse now than they did during the global financial crisis of 2008 and during Covid

CSI Continued:

There have been 8 distinct cycles dating back to the 1970s where the Consumer Sentiment Index was very pessimistic. The 12 months that followed those periods, the S&P 500 averaged almost a 25% return

Recession Continued

As I mentioned above, GDP did decline for 2 quarters in a row. However, other data should be taken into consideration as well Industrial production rose at a 4.8% annual rate in Q1 and 6.2% in Q2. Unemployment is now lower than at the end of 2021. Payrolls grew in Q1 & Q2

The Market 2022 has been off to a rough start We came into the new year with the market around 4800 On June 16th we hit a low on the year of 3666 – a decline of 23% The month of July was promising: The S&P 500 closed at 4130, an increase of 12.6% from the June 16th bottom

Gas Prices Gas prices continue to come down from their all-time high

In all seriousness, thank you for being my clients. It has been a privilege to serve you over this last decade. Here's to many more.