“It’s hard to get rich quickly. It’s easy to get rich slowly. It doesn’t happen overnight. With conservative investments, it takes a while. It takes discipline to keep adding value to your future, a little every month. It takes time to build your fortune and become wealthy.”— Jim Rohn
Rome was not built in a day. And the same philosophy applies to building anything worthwhile, especially wealth.
Don’t fall into the trap of get-rich-quick schemes. Instead, take the slow and steady approach, that’ll give you the best payoff.
There’s an adage that’s popular among intelligent investors: “Time, not timing.” Wealth building takes time. If you’re an average joe like a majority of the population, and not a stock market pro whose main job is actively managing investments, then I’d suggest you stick to time, not timing.
There was a study done a while back that analyzed stock market investments that investigated two different scenarios. In the first case, stocks were bought at the very worst possible time and sold at the very worst possible time i.e they were bought high and sold low. Over the span of 40 years, the average return was around 10 percent.
In the second case, stocks were analyzed over a 10-year investment period. Stocks were purchased at the best possible time and sold at the best possible time. After 10 years, guess what the average return was? Close to 10 percent.
As you can see, the first scenario prioritized time, while the second one prioritized timing. So, when you hear people talking about the best time to buy or sell stocks, just remember that timing is overrated and ignore them.
The most effective way to build wealth is to make continual investments in the long term. So, be patient as you walk on the path towards financial freedom.
Small, seemingly insignificant investments when compounded over time always yield mighty returns, never forget that. Just practice restraint, and focus on building wealth one step at a time.