Building wealth over the course of a lifetime is a pursuit that requires focus, dedication, and self-discipline. Living on less than you make and investing the difference is 90% of the battle, and we often think of this path as one of constant restraint, eating ramen noodles and spaghetti and shopping at thrift stores. Pinching every penny is one way to build wealth, but the good news is that once you get some momentum and see your wealth pass a certain point, a class of investments starts to open up that allows you to have fun and increase your wealth at the same time. CNN Money ran an article a few days ago with some ideas about how to live rich and then retire richer. Here’s a sample of my favorite suggestions:
- Going global: Buy real estate in exotic locales. Imagine buying a small villa in an up-and-coming tropical paradise (they mention Uruguay) and holding on to it for the next 30 or 40 years. Not only will you have the enjoyment of the property, but you can rent it out to vacationers for some extra income. When you’re ready to retire, you can always keep it as a vacation home or sell it, likely for a tidy profit. What could be better?
- Collecting profits: Invest in unknown artists. If you’re an art lover, buying works you love from artists who are poised to make it big is a win-win. You’ll get the enjoyment of the artwork and possibly make a handsome profit along the way. Granted, it may not be as lucrative as some stocks, but as the article points out, it’ll look a lot better on your wall than a stock certificate from Wal-Mart.
- Start a business: Be your own boss. Once you’ve amassed some cash, you could always take the plunge and start a business of your own. Lots of advantages to this route, but beware: the vast majority of most small businesses fail within the first few years, so before you put your life savings on the line, make sure you can live with losing it.
Building wealth isn’t usually thrilling. For the most part, it’s a slow and steady battle, which is what makes it so hard in the day-to-day. But once you get to a certain point, it can be both rewarding and fun at the same time. Hang in there…
Does anyone have other ideas on ways that you can invest and build wealth in ways that are enjoyable as well?