Ten Ways to Build and Gain Real Long-Term Wealth That Anybody Can Do

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Wealth is a goal many people want to achieve, yet it is elusive to most. For some, wealth signals security. For others, wealth symbolizes status and success. For many, wealth signifies a break from the past, which may have been a hard financial path as children or young adults. Whatever the reason, many people, despite making very solid money, never seem to build their wealth. Living a nice lifestyle if they make enough is common enough, but the actual goal of sizable wealth, let’s say liquid assets of $1,000,000 or more, eludes them.

Wealth accumulation takes discipline and, needless to say, hard work. However, following some pretty simple guidelines, combined with a solid career path, the goal of real wealth can be achieved by anyone who wants it badly enough. A sweet inheritance can help. The baby boom generation, those born from 1946 to 1964, are believed to be inheriting $11.6 trillion dollars, according to a study commissioned by insurance company MetLife. However, when that number is broken down, the median amount per person is about $64,000. Nice, but hardly huge wealth.

The accumulation of wealth is not an evil desire or goal. It not only can help build a lifestyle you want, it helps you provide for people you care for who may not be as fortunate. Plus, it gives you the ability to leave a legacy of sorts to family or institutions you feel are important. At the end of the day, business, pleasure and life in its totality are defined by money and the use of it. Things are not paid for in animal pelts or beads and trinkets.

Here are 10 top ways and rules for building solid long-term wealth that anybody can follow and use to their advantage.

1. Even with memories of the housing collapse still quite clear, owning a home is a must. Homes are like any asset — stocks, bonds, whatever. Homes properly bought at the right price, and not bubble speculation levels, can appreciate significantly. A home, plain and simple, can be an awesome long-term holding. Plus, the homeowner has the tax advantage of writing off the mortgage interest and the property taxes. For people who live in states with no state income tax, like Texas, Florida and others, that number may be significant. Bottom line, renting just makes money for the landlord.

2. Refinance NOW. If you own a home already, make sure you refinance to take advantage of these still low rates. A 30-year mortgage is currently as low as 4.35%, and a 15-year mortgage is as low as a 3.38%. These may vary around the country. Despite headlines about how rising mortgage rates will hurt the economy and cool down real estate, these are still the lowest rates in more than 50 years. Many homeowners with 6%, 7% or even 8% mortgages still have not refinanced. Do it now. Usually, any closing costs can be rolled into the loan to provide no out-of-pocket costs.

3. Save and invest on a regular schedule. Investment compounds, almost regardless of which investment vehicle is used. Max out your 401(k), especially if you have matching contributions from your employer. Let your contributions dollar cost average into those investments. If you are invested in mutual funds, dollar cost averaging in every paycheck helps you buy more shares when the price is down, less when they are up. Think about the magnitude of consistently investing in a tax-sheltered plan over a 40-year professional career. The maximum contribution to a 401(k) plan in 2013 is $17,500 per year, and let’s say your company matches 15%, or $2,625, for a total of $20,125. Over 40 years that is $805,000 if it does not grow at all, which is highly unlikely. Granted that number is the maximum, and many people early in their career are unable to do that. Invest every penny you possibly can and raise the amount you can contribute as soon as you can. The sum is staggering, given the long-term performance of the stock and bond markets.