Building wealth is often a slow process. Certainly, if you’re intent on sticking with stodgy index funds, then it may take forever to reach your financial goals. Unless you pick the right time to dive in, returns are uncertain over a decade or longer. Because of this, some people who are less risk-averse look to build wealth on the fast track.
Here are 5 wealth-building tips for you to accelerate your progress.
Learn Day Trading
Day trading is seen as risky but that’s only when you don’t know what you’re doing. Just like with any investment, it’s important to study the details and learn to be successful at it. That takes time and isn’t an overnight thing. However, developing skills in day trading is entirely possible and plenty of people enjoy the profits and the lifestyle to go with it.
You don’t have to do it alone either. You can consult experts about day trading stocks to accelerate the learning curve and become proficient in much less time.
Launch A Tech Start-Up
Tech startups are all about breaking new ground, offering something that hasn’t existed before and going for broke.
Quite often, they’re backed by venture capital when the idea is strong, and the planned execution is convincing. Giving up some of the potential upsides in exchange for investment capital and useful advice with experienced hands can work in some entrepreneurs’ favor here.
Start A Portfolio Of Niche Sites
Digital assets are increasing in popularity as investors see the chance to profit massively. Building a blog requires a year or two, but sites that generate a healthy monthly profit can be sold for 30 times their monthly income.
While this is not close to the multiples that billion-dollar businesses sell for, it can create substantial, lumpy returns through selling a portfolio of sites in one go and reinvesting the sale proceeds in other ventures.
A secondary option is to acquire successful blogs and continue to build them up. This puts more capital on the line but delivers faster results.
Buy Real Estate Foreclosures
Real estate foreclosures and property that’s put up for auction by the original lender is an opportunity to get a steal.
Sometimes, the previous owners left the place in a bit of a state which required some cleaning up. Yet, once modernized and re-listed, the home can increase substantially in value within a few short months.
It’s a competitive market, so it requires moving fast and looking at available listings shortly after they go up, and then bidding aggressively at the auction for the lots that you’re most interested in.
High-Yield Bonds
Investing in U.S. high-yield bonds or emerging market bonds is not for anyone with a weak stomach. While their yields can be as high as 5-10% percent, they bring with them the possibility of companies or countries that fail to meet the repayment schedule. This is because their credit rating is questionable in the case of U.S. high yield bonds and uncertain, as is the case with emerging market debt.
The trick here is to invest when the default rate is low, and the interest rate is good for the risk that you’re bearing. Not all high yield debt has a junk rating – but beware of thinking that you’re diversified if you own a fund of high-yield debt because a bad economy can impact the whole fund. Picking the right time to enter and exit high yield or emerging market debt is the key to success here.
Invest In Your Success
The thing with any investing is to not believe the hype. Higher than average returns are possible, but any claims need to be substantiated to be believed. Certainly, day trading and flipping auctioned real estate offers some of the biggest upsides for skilled practitioners. For everyone else, choose the one or two areas that you believe you’ll be successful in. Then be a sponge and soak up the knowledge needed to be successful at building wealth.
