The document outlines ten tips for wealth accumulation, emphasizing that financial success is achieved through a combination of strategic investment, time, and a well-structured plan. Key principles include controlling spending, continuous financial education, taking responsibility for one's investment decisions, and the importance of risk management. Additionally, it highlights the necessity of a written plan to avoid procrastination, which can significantly impact overall wealth over time.

1. 10 Wealth Accumulation Tips

2. Believe it or not, building wealth for a secure, early retirement is actually very simple…
The equation for financial success is a function of just three easy-to-understand principles:
1. The amount of money you invest.
2. The growth rate of your money.
3. The amount of time it has to grow.
Unfortunately, few people succeed in building wealth because it has little to do with understanding simple
principles and everything to do with taking effective action.
The challenge isn’t in knowledge, but in translating that knowledge into meaningful results.
You probably already know the three principles for compounding and building wealth. Most people do; yet, few
people actually live according to them.

3. Have a Plan
The first mistake most people make is they lack a written plan to build financial
security.
You can’t put the formula for financial success to work for you without a plan to
accomplish it.
It may be a simple process, but it won’t happen randomly. You make it happen by
taking action. A written plan with goals provides the road map and is a necessary
first step.
Financial success is a choice. It results from the many small decisions you make each
and every day. Without a plan and goals to achieve wealth, your life is like a sailboat
without a rudder: it just spins in circles without definite direction.

4. Lifestyle Lags Income
Most people prefer the trappings and illusion of wealth over the freedom of actual
wealth. They want to look wealthy rather than be wealthy.
Don’t believe it?
Just look around you and see how many people are in debt compared to how many
people are wealthy. Most people choose lifestyle over financial freedom and violate
the first principle in the wealth building equation: accumulate assets.
They spend instead.
The problem is you will never become rich by spending money. You must control
your spending so that your lifestyle lags behind your income. This will create
available capital for your investment activities.

5. Invest in Your Financial Education
This is critically important because financial intelligence cannot be developed
overnight any more than wealth can be accumulated overnight. It takes time and
disciplined effort.
The earlier you learn your lessons, the less they will cost you. You’ll gain experience
on smaller investment decisions, where mistakes can be offset by new savings.
The longer you wait to learn these lessons the more they will cost you. That cost
comes in the form of years of missed opportunities and mistakes made with big
investment decisions later in life that can’t be offset by savings.
There is nothing more financially dangerous than an investor making a million
dollars’ worth of decisions with a thousand dollars worth of financial intelligence.
When it comes to investing, a little knowledge can be a dangerous thing, and a lot
of knowledge can be a profitable thing. Get a lot of knowledge.

7. Put Your Wealth Building on Auto-Pilot
The easiest, least painful way to save your way to wealth is automatically. Arrange your
finances so that every month certain actions take place that automatically grow your assets
without any decisions or extra effort on your part. This creates an enforced discipline to
keep you on track. Below are a few examples:
Own Your Home: Purchasing your personal residence has several advantages. A portion of
each monthly payment pays down debt which builds equity, automatically. Assuming you
finance with a fixed interest rate, fully amortizing mortgage, you can expect appreciation
from inflation over time; yet, you will repay a fixed amount of debt with depreciating
currency. Again, that’s automatic.
Rental Real Estate: If owning your own home is a great idea, then owning even more homes
where someone else makes the payments for you is an even greater idea. But be careful:
make sure the property has a safety margin of positive cash flow and make sure you’re
willing to deal with the potential headaches of being a landlord.
Tax Deferred Retirement Plans: Maximize your contributions to your tax-deferred
retirement plans so that the money comes out of your paycheck automatically before you
ever see it. This is a relatively pain-free way to save because you seldom miss what you
never had.

8. Don’t Procrastinate – Start Today
The next variable in the wealth accumulation equation is the amount of time your
wealth compounds and grows.
If you wait just six years to get started and your assets grow at 12% annually, you will
have half as much money when you retire compared to starting today (assuming equal
contributions over your working lifetime).
If you wait just twelve years you will have only a quarter as much.
That’s a life changing difference in net worth for just a little procrastination. Just getting
this one idea into your bones early enough can change your financial future. It’s that
important.
The power of compounding is an invaluable wealth-building tool because money grows
geometrically instead of arithmetically — but only when you give it time to work.

10. Take Responsibility for All Your
Investment Results
Unless you are a trust fund baby or win the lottery, the way you will become wealthy is
by owning full responsibility for every aspect of your wealth.
This causes you to get into action and correct and adjust your plans until you reach your
goal. You must build your wealth like an entrepreneur builds a business: “if it’s got to be,
then it is up to me.”
You are solely responsible for organizing your life so that wealth accumulation is a habit.
Nobody else will do it for you.
You are the one that determines the priority of your spending habits and whether your
lifestyle lags your income or not. You are the one who determines whether you start
today or procrastinate until tomorrow.

11. Commit What Is Necessary to Succeed
Successful retirement planning requires you to provide the necessary resources to reach
the goal. Don’t set yourself up for failure by under-committing.
For example, you don’t want to build a retirement plan around owning and managing
rental properties unless you want a part time job. Operating real estate requires effort
and can be appropriate for some people and not for others depending on your values,
interests and skills.
Don’t commit to real estate as your path to wealth unless you are willing to commit to
doing the work required to run a real estate portfolio properly. It isn’t a 100% passive
investment. It is part business and part investment for as long as you own it.
Similarly, you don’t want to build your retirement plan around passive investing in paper
assets if you’re in your late 50’s, have zero assets, and are just getting started. Someone
in that situation will require greater leverage and require active investment strategies to
make up for the late start.

12. Make Your Money Hard to Reach
A pile of savings that is easy and pain-free to reach is an easy solution to life’s troubles.
And that’s a bad thing.
Your car breaks and you use your savings to buy a new one. You get laid off and use your
savings to carry you through until the perfect job arrives. Life throws you curve balls,
and savings without barriers to protect them are an easy target for solution.
That is why I love the government-sponsored retirement plans with all the difficult rules
and penalties you must overcome to access your money prior to retiring. These
obstacles provide a measure of discipline for those who inherently lack this life skill.
Even if you have the discipline of a celibate monk, the rules and penalties provide a
formidable barrier for your inevitable moments of human weakness.
The rule is simple: when you build a nest egg, don’t raid it. Never borrow money from it
for current lifestyle and don’t spend a dime of it until after you retire.

13. Risk Management Is Essential
The mathematics of compounding wealth prove that avoiding large losses is equally as
important to growing your wealth as pursuing large gains. They are mathematical flip-
sides to the same coin.
For that reason, a smart investment strategy manages risk of loss and volatility risk using
a variety of tools. These include diversification, careful asset selection, valuation, and a
sell discipline to create a defensive investment plan.
While it is essential to practice defensive investing through risk management it does not
mean you should avoid risk altogether by hiding out in Treasury Bills or other so-called
“safe assets.”
You must have an aggressive, offensive investment strategy to build wealth because
your objective is to grow your assets faster than inflation erodes them so that you
increase purchasing power. Hiding out in safe investments won’t achieve that goal.

15. Basic Estate Planning
It is irresponsible to leave a burden for those you leave behind. The fact is you will die
with 100% certainty.
No one likes to think about it, but that’s the reality. Another reality? Your loved ones will
be distraught over your passing, busy with their own lives, and not interested in
cleaning up a messy financial legacy.
Your estate plan covers your financial assets and also helps set a clear legacy. Get your
affairs in order and make all the decisions about who gets what now. Depending on your
particular circumstances this might include:
• Powers of Attorney
• Will
• Living Trust
• Life insurance
…and much more depending on your circumstances and desires