Of course nearly everybody wants to get rich, but most people don’t know how to go about it.
Here are some tips from Forbes on multiple ways to get on the right path… and we’ll share more of them in future posts.
From the Forbes 2014 Investment Guide, wealth building tips to last you through the year. (For more detailed advice, click on the link in each tip.)
Sir John Templeton: “Invest at the point of maximum pessimism.”
Don’t mistake a low P/E ratio for a value stock.
Benjamin Graham: “Patience is the fund investor’s single most powerful ally.”
Let your attorneys ride shotgun, but not in the driver’s seat.
Remember Enron; reduce your employer’s company stock in your 401(k).
Warren Buffett: “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1!”
Fund a Roth IRA if you’re eligible; your money grows tax free for retirement, and in an emergency you can take your contribution back without penalty.
Barry Sternlicht: Pay attention to the big themes, because they are what will help you earn ten times your money.
Back a friend or relative’s startup with a convertible loan, so you share in the upside.
Use commodities as a hedge against inflation.
Raise the deductibles on your auto and home insurance.
Form family limited partnerships to transfer assets at a tax discount.
Beat death taxes in 20 states by making big gifts while you’re alive.
For simple federal tax-free wealth transfer, make $14,000 annual gifts to children and grandchildren. It won’t cut into your $5.25 million lifetime exemption from gift and estate taxes.
Get tax advice before settling a lawsuit.
Read Reminiscences of a Stock Operator by Edwin LeFèvre.
To keep peace with both relatives and the IRS, document all family loans.
Peter Lynch: “Never invest in any idea you can’t illustrate with a crayon.”
View collecting as a hobby first and investment second; psychic returns can make up for a lower average return than in stocks.
Add a personal items floater to your homeowner’s insurance to cover collectibles.
Read the rest of the tips on Forbes.