To The Moon

Creating wealth isn't about luck or inheriting a fortune—it's about cultivating habits that lead to financial success. According to Malik S. Lee, a seasoned financial planner with 15 years of experience advising affluent clients, the wealthiest individuals share three key habits that have significantly contributed to their financial freedom. Here’s how you can emulate these practices to create your own path to wealth:

Prioritize Savings as Your Biggest Expense

Contrary to the common portrayal of the wealthy flaunting lavish lifestyles with luxury cars and grand mansions, their most significant annual expense is often their savings. Lee highlights that his most successful clients consistently save at least 25% of their total income each year. While most financial advisors recommend saving 10% to 15% of your income, increasing this percentage whenever possible can accelerate your journey to financial independence. If you’re just starting out, even saving 10% of your income is a strong foundation.

Establish Robust Risk Management

Accumulating wealth is only half the battle; protecting it is equally crucial. Lee emphasizes that safeguarding assets against poor investment choices, market volatility, and unexpected expenses is vital. Over-spending, inflation, longevity, and litigation can all erode your wealth if not managed properly.

Effective risk management often involves purchasing life insurance to shield assets from estate taxes and using accident and health insurance to mitigate the impact of unforeseen events. The cost of such insurance is minimal compared to the potential financial losses from unprotected risks. Therefore, building a solid insurance portfolio is a critical step in maintaining and growing your wealth.

Leverage a Team of Experts

No one becomes wealthy alone. The wealthiest individuals typically rely on a team of professionals, including lawyers, tax advisors, insurance experts, and financial planners. This team provides invaluable insights and actionable strategies to help manage and protect assets. Their expertise ensures that the wealthy can make informed financial decisions, prioritize financial goals, and stay ahead of the ever-changing financial and legal landscapes.

Applying These Insights to Your Life

To start building wealth, adopt these three habits:

Save Aggressively: Make savings a top priority in your budget. Aim to set aside a significant portion of your income each year.

Manage Risks Wisely: Protect your assets through comprehensive insurance and smart financial planning to cushion against potential losses.

Seek Professional Advice: Assemble a team of financial professionals who can guide you through complex decisions and provide tailored advice to keep your financial goals on track.

By integrating these practices into your daily life, you position yourself to not only create wealth but also sustain it over the long term.