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Friday, June 21, 2024

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Time Is A Major Factor In Your Ability To Build Wealth

By Aaron Allen, The Seattle Medium

Many people believe investment and wealth building are for the rich, and in the Black community, in particular, there is a common sentiment that the ability to generate and build wealth may be out of reach to most of them. However, in recent years, wealth building has become a focal point when it comes to the consciousness of Black America.

As a company, JP Morgan Chase is trying to help change the perception that wealth building is for only the rich, and that no matter where you are in your financial journey wealth building is a possibility for everyone.

“What I am passionate about is helping people reach their financial goals,” says Denis Nemeth, a private client advisor team member with JP Morgan Chase.  “I typically meet with clients at different stages of their financial lives and working through what they are building as they embark on their journey towards financial freedom.”

According to Nemeth, JP Morgan Chase wants to be an industry leader when it comes to helping individuals succeed in their efforts to build wealth and pass it along from generation to generation.  

“Chase by nature has been at the forefront to try to make sure that people have the tools they need to succeed,” says Nemeth.  “And my job is to help clients realize whatever it is they are trying to realize.”

While many people may procrastinate to embark on their wealth building journey, many experts will tell you that could be a mistake because time is one of the major factors that can affect a person’s ability to build wealth.

“Time is our best friend when it comes to investing,” says Nemeth. “We can quickly lose sight of that by putting our heads down and get tunnel vision on the day to day.”

Nemeth says that young people, regardless of their income level, are in the best position to build wealth because they naturally have a longer timeline when it comes to accumulating wealth and assets. But, as with most things, it takes proper planning to help create the best possible outcome.

“So, I would want to understand with that young person embarking on this journey, what type of career opportunities are open to them and if they have a way to earn a paycheck, that’s number one,” says Nemeth. “Once I understand where that is and how they are going to do that then I want to make sure that we explore what benefit packages or options are available for savings towards retirement.”

Chase offers what is called the Seven Principles for Successful Long-Term Investing. According to Chase, “these are seven-time tested strategies for guiding people and their portfolios through challenging markets and towards tomorrow’s goals.”

These principles are as follows:

1. Plan on Living a Long Time. According to Chase people who are 65 today have a very good chance of living to 80 but studies show many of them have not saved for the retirement years. Planning should start early by saving more, investing with discipline and having a plan for the future.

2. Cash Isn’t Always King. Cash can be a “safe haven” during volatile markets but holding too much can come at cost and traditional savings accounts are still well below inflation.

3. Learn How to Harness the Power of Dividends and Compounding, investing is risk assets and reinvesting dividends can be a powerful tool. Reinvesting dividends allows money to continue to grow, while compounding can make a big difference over time.

4. Avoid Emotional Biases By Sticking To A Plan, in good times and bad, stay the course.

5. Volatility Is Normal; Don’t Let It Derail You. Plan on riding out volatile periods, on average markets suffer a double decline every year.

6. Diversification Works. Time and again diversification serves its purpose. Diversifying of stocks, bonds and other uncorrelated asset classes have proved invaluable.

7. Staying Invested Matters. According to Chase, “it is always darkest just before dawn.”

“We find that we can really help people at every stage of the way,” says Nemeth. “The way we get there is that we make sure that money does not become a taboo subject. We really try to encourage folks to talk about money.”

“I want them to understand the benefits and options that are available to them that they may not be taking advantage of and then leveraging JP Morgan’s insights on the Seven Principles of Successful Long-Term Investing, which are the basic tenets that really will guide anyone to mastering their wealth,” adds Nemeth.

Joseph Adams, a construction manager in Seattle, believes that building wealth is vital when it comes to uplifting our community, but unfortunately the basic foundations of building wealth and starting early are things that are not widely taught or talked about in the Black community.

“Black folks are used to living day-by-day, paycheck-to-paycheck,” says Adams. “We were never really taught to look towards and prepare ourselves, our families and our future generation on a financial level.”

“Beyond maybe your successful real estate agent, who is doing well, or a family member making good money, planning a strategy towards generational wealth is something new to the Black community,” he adds.

Nemeth says that there are far too many people who believe that it is nearly impossible to build personal wealth and create some sort of financial security for themselves and their family. While there may be some barriers in place or circumstances that make it difficult, there are resources available for anyone who is passionate, disciplined and willing to learn to make the changes necessary and to improve in their understanding of finances and utilize proven strategies to build wealth.

“This doesn’t apply to me, this is above me or I do not have enough set aside to get involved in something like this are answers I hear to financial questions from people who come into banks every day,” says Nemeth. “There are resources and what I would challenge them to do is ask questions, ask about your resources, put yourself out there, there is nothing wrong with learning.”

“You would be surprised where this could take you and I would challenge the community to do that and seek the help from someone in my profession,” says Nemeth. “It is really nice to give back in that capacity and see someone’s eyes light up as they start to understand that all of these little things that you do today can have a snowball effect later in life and they feel so great taking that first step.”