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Trying to build wealth is not a simple task. People often think that it happens through investing in ‘get rich quick' schemes, however, this is not the case. To build wealth you need to make money, save money and finally, and most importantly, invest money! The first step to building wealth is to assess your budget, comparing your monthly income to your estimated outgoings on a monthly basis. You may find that you are just breaking even each month or preferably that you have surplus income.

If you should have surplus income but your bank balance is staying level because you are not saving any money, you may have some spending issues that you need to assess. You may be prone to buying ‘things’ rather than investing in assets. Do you really need the newest phone or gadget, or are your wardrobes starting to bulge with beautiful clothes and shoes? To grow your wealth it is important to save this money rather than spend it where possible.

If you find that you do not have a lot of surplus income that you can save or invest then maybe you could look at ways you can increase your income or decrease your outgoings.

With regard to income could you negotiate a pay rise in your current job or find a new job that pays you a higher salary? There are also ‘side hustle’ options such as working as a copywriter, teaching an online course, starting a YouTube channel and so on. There are a wide array of ways to make extra money if you are prepared to put in the time and the energy.

In relation to outgoings could you shop around and get better value for your phone package, electricity costs or insurance? Are you getting the best value for money on your current plans or do you just keep renewing them without actually looking at the costs involved?

Finally, it is important to understand that to build your wealth you must take some investment risk. Depending on how much risk you are willing to take, this can be quite a nerve-wracking experience. History has shown us that the stock market will outperform other asset classes over the long term however during that journey there will also be sharp and significant falls. When this happens it is essential that you hold your position and wait for the value to increase again. It can prove difficult but it is important to keep your emotions out of your decision making during falling markets as this can lead you to make snap decisions that you will regret.

Consistency and commitment win every time. This is valuable to understand and accept when you invest your money. You can invest your money in the bank or the credit union however the returns on this money are currently close to zero. In comparison, the average stock market return is almost 10% per annum.

Marie Carr MSc BBS QFA RPA is a Qualified Financial Advisor and Retirement Planning Advisor. You can contact her through John F. Loughrey Financial Services by telephone on 074-9124002 or by email on marie@jfl.ie