To build wealth, it's crucial to focus on acquiring assets while minimizing liabilities. Assets are things that put money in your account or increase in value over time, such as:
On the other hand, liabilities are debts that require monthly payments, like:
The key is to have assets that generate income or appreciate in value, while keeping liabilities under control. Homes and retirement accounts are often the first assets households begin to build.
To build wealth, it's important to:
With patience, consistent savings, smart investing, and debt management, you can steadily grow your assets and net worth over time. The more assets you acquire that appreciate or generate income, the faster your wealth will compound.