Wealth is the abundance of valuable possessions or money. Being financially stable and especially wealthy is key in achieving most of life’s goals. But there is a process to this. Securing a financial future requires fully understanding the flow of money in one’s financial life. This is what comprises the wealth cycle. It’s the investment choices, priorities and eventually decisions that either lead you to, or away from wealth creation. According to the Haven Wealth Group, the wealth cycle involves four stages; Wealth creation, wealth accumulation, wealth growth and management, and wealth preservation. Wealth creation This is the income stage and a very important part of the financial journey. Wealth creation is defined as the steady accumulation of income and assets over a period of time. At this stage, it’s when one devices or comes up with different sources of income to boost their earning. It is advisable to have multiple sources of income other than depend on only one stream. Wealth accumulation This part ideally translates to saving. Financial experts say it wise to save for investments, rather than save for the sake of saving money. Saving for investment is one sure way of accumulating wealth. Both saving and investment takes discipline and having a prudent strategy. Some of the investments one can make include real estate, stocks and bonds, among others. All of them vary according to one’s income and stage in life. Wealth growth and management Strategic investment and risk management is imperative, especially when a person is in their 40’s, the website indicates. This is a critical period to assess where you are, correct past mistakes, and ensure that your retirement savings will be able to last you the rest of your life. Many people spend more time planning their next big purchase than they do focusing on their financial health. This could spell financial ruin when you’re ready to retire if your assets won’t support your current lifestyle. Wealth preservation This financial stage requires ample financial planning. Here, one should be prepared to maintain their income and assets. As you diversify your investment for better investment options, it is also vital to evaluate the risks of the investments already made as well as the ones you are planning to make. It is also advisable to get insurance for your assets in order to work as a monetary cushion during financially difficult times.
