Why Work Doesn’t Build Wealth Alone, but These 5 Strategies Do

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Although an active income is one part of your financial picture, working alone won’t build wealth. If you want to build wealth, you’ll likely need to look beyond your day job.

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Explore the following strategies to help you build wealth going forward.

Everyone knows that saving money is important. But just letting your savings collect a pittance of interest in a traditional savings account won’t propel you to a brighter financial future.

“While saving is a necessary condition for accumulating wealth, it is not a sufficient one,” said Robert R. Johnson, Ph.D., charted financial analyst (CFA), chartered alternative investment analyst (CAIA), and professor of finance at Creighton University.

“People need to both save AND invest. I see many people who are actually pretty good at saving via 401(k) plans and IRAs, yet don’t provide themselves sufficient funds to retire, because they didn’t prudently take risks with those funds.”

If you are looking for a place to start your investment portfolio, getting familiar with low-cost index funds is a good place to start.

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Investing at all is great, but investing money early in your life is even better. When you invest early, you give yourself a chance to reap the benefits of compounding.

“The surest way to build true long-term wealth is to invest in the stock market,” said Johnson. “Mistakes begin early in life and the biggest financial mistake people make is taking too little risk, not too much risk. In fact, a UBS study showed that millennials and the World War II generation have similar asset allocations — low allocations to equities and inordinately high allocations to cash.

“Both generations were shaped by cataclysmic financial events in their formative years — the WWII generation with the Great Depression and millennials with the financial crisis. Millennials need to begin compounding early, and let that compounding work its patient magic over decades.”

Don’t let fear hold you back from putting your funds to work.

It’s tempting to try to buy low and sell high. But it’s almost impossible for the average investor to accurately predict the rise and fall of the market.

“Many people think that they can avoid market declines by moving in and out of the market,” said Johnson. “A mistake many investors make is attempting to time the market. Attempting to time the market is ‘fools gold.’”

He continued, “The best way to counteract this tendency is to practice dollar cost averaging in a broad based stock market mutual fund or ETF — like one that tracks the S&P 500. That means you are consistently buying into the market whether it has headed up, down or sideways.”

If you are working a W-2 job, a little bit of intentionality can go a long way when it comes to making the most of your compensation.

“The easiest way to build wealth is to tweak your outlook on W-2 income,” said Robert Persichitte, CPA, certified financial planner (CFP), CFE and affiliate professor at the Metropolitan State University of Denver.

“Find tax-efficient, cost-effective ways to build wealth on auto-pilot. For most people, the best way to do that is to max out your employer’s plan (401k, 403b, etc.). Don’t stop at the employer match. Set a goal to hit the maximum ($23,500 for 2025).”

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It can be difficult to build wealth if you don’t understand the mechanics of your finances. Since most of us don’t learn about money in school, making an investment in our financial education should be a top priority for many.

For example, you might listen to a podcast or read a book about managing your finances to get you started down the right path. A few worthwhile personal finance books include “The Automatic Millionaire and Think and Grow Rich.”

As you beef up your financial education, you’ll likely grow more comfortable making money decisions that set you up for the future. Generally, more knowledge might help you put more focus on investing for tomorrow than just spending for today.

At some point in your financial journey, the goal becomes earning money without sacrificing your time. If you only trade your time for money, it can be difficult to grow your wealth. Instead, you need to put your money to work for you.

For most, investing in stocks is one baseline investment that generates income. But the wealthy often look beyond this entry-level point to create other passive income streams.

For example, you might build a business that generates income through the input of your team or create an asset that generates royalties over the long-term.

Generally, building wealth boils down to working smarter instead of working harder. Although your day job’s income is a useful tool, it’s what you do with that income that sets up your financial future.

If you don’t tuck anything into investments or spend time building other income streams, you’ll always rely on your active income to make ends meet. Break the cycle by looking toward the future and making decisions about your money with a long-term vision.

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