ACCUMULATING WEALTH
3 Keys To Accumulating Wealth
Time and Consistency
Time & Consistency
Having your clients set aside money on a regular basis, and doing it as early as possible, can have a tremendous impact on their accumulation value. The chart above shows how as little as $100 a month can grow, given enough time. It also demonstrates the high cost of waiting.
Rate of Return
Rate of Return
Many of your clients will spend unlimited time trying to save a quarter percent on their 30 year mortgage. While they understand how big of a difference that makes over 30 years on their mortgage, they don't always apply that when trying to accumulate wealth. The Rule of 72 says if you divide 72 by your rate of return, that tells you approximately how long it will take your money to double. If you average an 8% return on your accumulation, your money will double every 9 years.
The chart above illustrates why your clients need to strive for the best return possible.
Minimize Losses
Minimize Losses
Nothing disrupts consistency or rate of return, like a 30 - 40% loss on your client's accumulation value. Equally important, your client needs to understand the return necessary, just to get back to where they were. If they suffer a 50% loss, they need 100% gain, just to get back to even. The chart above shows the true impact of losses on an accumulation account.