Simple Asset Allocation, Wealth Building Strategies - Build Wealth Quickly

By Frank Miller

Many of my friends and colleagues have taken a serious hit since the financial and property market meltdown in 2008. Indeed, much of what people worked for all their lives has vanished as their asset values fell off a cliff. Some have even lost their businesses and others are grappling with serious negative equity and massive debt attached to their real estate. But even as everyone wrestles with these financial challenges, they're finding new opportunities...and these opportunities are not under their mattresses!

There is always opportunity in crisis. On a personal level this is a great time for re-assessing your life goals and values. From a wealth building perspective, apart from snapping up distressed assets at bargain-basement prices, possibly the true financial opportunity is something less obvious. Perhaps it's the opportunity we have to realign our thinking regarding wealth and how we build it. Here's an outline of 4 steps you could take in order to start rebuilding your wealth.

To help you get started, a basic overview of the paper assets investment landscape goes like this: There are 2 types of investments; ownership investments in which you own part of the asset (a stock is a good example) and loan investments in which you lend money to someone and they pay you interest (a bond is a good example). In many cases, you are looking for growth investments and those are ownership-type investments. (Bonds rarely provide a way to make you wealthy. Rather, they are a way to protect your wealth once you have it). Warren Buffett is a great example of someone who created massive wealth through investing in paper assets.

Real estate is another great way to build wealth. With real estate, you typically buy a property and then make money through selling it eventually for a much higher value than its purchase price and/or becoming a landlord and letting the property. One of the advantages of real estate investing is using the principle of leverage (i.e. a mortgage) to buy an asset that you otherwise couldn't afford. Leverage isn't commonly available in paper assets investing (although you can buy on margin but this can be risky if you don't know what you're doing!).

You have heard over and over again, build a business that is the road to wealth and independence. Let me mention something here. There are those who have made a living at victimizing you and then telling you, the failure is you not the business. The truth is that your failure may be part of it, the other most likely is the lack of support or the "lies' you are being fed. Most of these guru's in marketing did not make their fortunes overnight. It took some time and a lot of thought, into their campaigns and promotions. Most of them are based on how they can take advantage of you. More on this later.

So, you're keeping winning investments or cash them in, weeding out the losers from your portfolio and realigning your asset allocation. What next? Well, now it's time to focus on increasing your returns and growing your investment portfolio. Whilst paying down debt, especially what I call 'bad debt', is hugely important, equally so is re-building your wealth with sound and advantageous use of 'good debt'. Focusing on building wealth is critical so that the focus isn't on debt reduction only. Apart from hunting down real estate or other business opportunities in your state or country you really must think and act globally. You simply can't afford to rely on any one economy so don't be afraid to seek out opportunities in foreign territories and emerging markets. Diversification by both asset type (stock, real estate, bonds etc) and geography has never been more appropriate. So, rather than ever waiting for markets to change you can take charge of your own financial bailout and re-build your wealth. Re-assess and re-balance your portfolio. Rethink your wealth building strategy and then focus on growing your wealth.

About the Author:

Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Have a Good Retired Life by means of Self Managed Super Funds and Property Investments You have full permission to reprint this article provided this box is kept unchanged.