Think investment returns are the key to building wealth? Think again!
In this episode, Eric and Kali share six powerful guideposts that, if followed, can generate the power you need to increase your net worth. No stock picking or secret investment strategies only the rich know required.
Discover why your savings rate matters more than your investment returns, why time in the market beats timing the market, and how to build financial flexibility into your plan so you can adapt to whatever life throws your way.
You’ll also hear about practical strategies for managing variable income, avoiding lifestyle creep, and making sure your spending aligns with what truly matters to you.
If you’re ready to focus on what you can control and build wealth the reliable way, this episode is packed with actionable advice you can implement immediately.
Key Takeaways
- Your savings rate matters more than your investment returns
Focus on what you can control. Saving 25% of your income with modest 6% returns will outpace saving 10% even with exceptional (and totally unrealistic!) 14-15% returns. The math is clear: consistent savings beats hoping for outsized returns.
- Time in the market beats timing the market
Stop trying to predict market peaks and valleys. Long-term participation in the market leads to successful outcomes far more reliably than attempting to jump in and out at the “right” moments. What looks obvious in hindsight is nearly impossible to predict in real time.
- Plan for the unexpected to happen
Build buffer room into every aspect of your financial plan. Keep extra emergency reserves, use conservative assumptions for income growth and savings rates, and save aggressively when you can so you have flexibility later when life inevitably changes.
- Don’t count on variable income for fixed expenses
If you receive bonuses, commissions, or equity compensation, base your fixed expenses (mortgage, car payments, etc.) on your guaranteed income only. Use variable income as “icing on the cake” for savings and discretionary spending.
- You determine what actually matters
Avoid keeping up with the Joneses or following someone else’s definition of success. Test different spending categories to discover what truly brings you joy and aligns with your core values—whether that’s family, wellness, learning, or something else entirely.
- The best plan adapts to change
Financial planning isn’t about accurately predicting the future—it’s about creating flexibility to adapt to whatever unfolds. Build modular plans that can evolve as your values, goals, and circumstances change over time.
Ready to create, use, and enjoy money for life? Request a complimentary consultation with us at BYH and discover how to optimize your investments, reduce your tax burden, and grow your wealth: https://beyondyourhammock.com/schedule