What are the Most Durable Wealth-building Strategies?

Plant on top of coin

There’s a reason that wealth is “built” as opposed to assets which are merely “acquired”. More often than not, a high income or large inheritance only leads to short-term pleasures or luxuries.

Wealth, on the other hand, is often the result of strategic investments and methodical planning. It’s multi-generational and goes beyond a flashy car, lavish mansion, or pricey getaways.

Building wealth is much the same as building anything that you hope will stand the test of time. 

The same way you would consult an architect or engineer about any building’s plans, is how you should approach your wealth-generation strategy. In short, wealth is something that requires a high quality, strategic plan.

That said, being wealthy doesn’t mean that you have to be a multi-millionaire. Being in a position to maintain a comfortable lifestyle and retirement for yourself and your loved ones is perhaps the truest definition of wealth.

With the cost of living perpetually on the rise all over the world, investing in real estate is one of the most failsafe ways to build wealth.

Read on to learn more about how to build wealth by generating a passive income through real estate — and how to stay liquid while you’re at it.

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Sustainable Wealth Creation Strategies

If you’re among the people who believe that wealth-building is for people that are already financially stable, then you are in good company. Especially if you attribute wealth to access to resources such as financial planners and advisors.

A good financial planner can assess your risk tolerance and risk capacity to help you start investing or kick your current investment strategy up a notch. In addition, having someone to hold you financially accountable can help keep you on the right track.

While it would be awfully convenient to have a professional on hand to help you formulate a budget and manage your finances at all times, they often come at a hefty price. The number of bankrupt moguls suggests making sustainable long-term investment decisions  is much more important.

Sustainable wealth is all about having a reliable source of income. Regardless of your circumstances, having safety-nets in place that you are confident will catch you in the worst-case scenario is perhaps the truest mark of secure wealth.

Between trying to balance your regular 9 t0 5, side gig, family obligations, and personal life, having enough time and money to invest in income-generating real estate may seem impossible.

However, there are a myriad of ways that you can generate a passive income and build wealth from real estate without stretching yourself too thin. 

While some investments may appear to be safer or more certain than others, when it comes down to it, there is no such thing as a sure thing. In other words, real estate isn’t the only investment option out there. Conventional wisdom also suggests that its always best to diversify your portfolio as far as is reasonably possible. 

Bottle with Coin

Acquiring Passive Income Through Real Estate

You’ve heard it a million times — because it’s true. Real estate is the most reliable investment you can make. In fact, Andrew Carnegie, the Scottish-American industrialist, famously claimed that most millionaires made their fortunes by investing in real estate.

Few things have stood the test of time quite like real estate. Think about all the family homes that have been passed down from generation to generation, for example — homes whose values have been steadily appreciating for decades.

Relatively speaking, real estate values are pretty reliable. That’s why it makes so much sense to invest in income-producing real estate. A reliable investment leads to reliable income. In the long-term, an investment that produces a smaller, but regular income is far better than one that promises massive returns but doesn’t deliver.

If your goal is to build wealth, then you should be looking into an asset that will generate a long-term passive income. Commercial property always comes highly recommended as the best passive investment for good reason. 

Depending on the location, you can generally expect decent returns on your commercial property. More importantly, however, is that commercial leases are typically long-term agreements — guaranteeing your income for years to come.

Commercial Buildings

Self-storage investing, however, is one of the rising stars of the real estate market. Whether you’re building your own self-storage facility, buying one, or investing through a Real Estate Investment trust (REIT) — you’ll likely find that it’s the closest you can get to a truly passive real estate investment.

Setting aside the low overhead costs and minimal managerial oversight — the demand for self-storage facilities is almost guaranteed to continue rising. With our increasingly globalized environment, more people are on the move than ever before — investing in storage is almost a no-brainer.

Once you’re earning a second stream of income, your risk capacity is significantly increased and you are generally in a better position to take on more — and perhaps riskier  — financial endeavors.  For example, you could channel your active income toward a 401k and daily expenses while you use your passive income to diversify your portfolio.

That said, there are a host of commercial real estate opportunities to consider exploring including crowdfunding and real estate syndication. The right investment for you will depend on your financial situation, investment goals, and risk tolerance.

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How to Obtain Wealth in 2021

With all this talk about investing, it’s easy to assume that saving has no place in your wealth-building strategy. After all, what’s the point of having money sitting in the bank when you can invest it in high income-generating assets, right? Wrong.

Unlike investing, saving is almost risk-free. Practically speaking, however, saving probably won’t make you wealthy, and depending on your bank, you’ll probably only earn a relatively low annual return on your savings.

Investing — if done right — has the potential to earn you millions. Just think about the Bitcoin boom back in 2017. However, hitting the investment jackpot is rare. You are much more likely to earn a small, regular income from your investment though the former is not entirely impossible.

Having a substantial emergency fund ready to get you out of a bind — be it unforeseen medical expenses, tuition, or a family emergency — can be the only thing keeping you afloat when your ship is sinking. 

Even though you may be preparing for a rainy day, there’s no harm in sowing some seeds while you’re at it. Putting your money in a high-yield or high-interest savings account, for example, allows you to toe the line between saving and investing.

With a high-yield savings account, you get to save, accelerate the growth of your money, and retain access to it — a perfect complement to your investment strategy.  That said, if you’re not in the best financial position at the moment, then you could start saving up with the purpose of investing the funds later. 

Of course, it’s also generally a good idea to keep money on hand in case investment opportunities arise. There’s nothing worse than staring a great opportunity in the eye and being forced to walk away — or get into unplanned debt — because your finances just aren’t in order. 

While it may seem smart to split your income between as many investment opportunities as possible, tying all your money up in assets is never a good idea. It’s always best to have a savings account and a couple of assets you can easily liquidate in your portfolio should the need ever arise.

Plant with bottle of coins

Having a lump sum available to cover the cost of a down payment, buy shares, or pay for insurance cover is one of the best ways to ensure that you don’t miss out on any of the great investment opportunities that may come your way.

That said, retirement savings are just as important as your rainy day fund. However, saving for your retirement should be a long-term goal

That means that it’s perfectly fine to channel a portion of your income into medium-to-long-term investment opportunities. Real estate investing, for example, has the potential to generate an income that could provide for your retirement either by virtue of appreciation or by earning you a regular passive income.

Whether you’re saving in order to invest in something big, putting money away for your emergency fund, or contributing toward your retirement — saving is an essential component of any wealth-generation strategy in 2021.

Conclusion

Building wealth isn’t impossible — it just takes time. Unfortunately, for most people, financial management and investing wasn’t a part of their regular school curriculum — and that’s probably why it can seem so daunting.

In truth, everyone in a position to do so should be planning for the long term. Retirement is an inevitability and providing for your future self should be at the top of your priority and investing in self storage units is a great way to get started!

The Self-Storage Private Money Summit Live From Dallas, Tx

This is your opportunity to see cutting-edge syndication strategies that are creating a killing for a “select group” of commercial real estate investors and self-storage professionals.

August 5th to 7th 2021