Financial Tortoise: Practice Frugal Wealth

2022 was a much better year for slow-and-steady investors after years of being great for those looking for a quick gain. Much like the old story of the tortoise and the hare, long-term investors tend to fare well over time.

That’s true even if their yearly gains aren’t as big as those of short-term traders in a bull market. It’s also the case that those who become wealthy tend to keep their wealth, provided they follow a few time-tested strategies.

The world is full of status symbols, such as large homes and fancy cars. In a period of growing wealth, chasing those symbols can eat up wealth as it’s being created.

A better strategy is to keep one’s finances grounded in reality. With cash in the bank and a growing investment account, the temptation will always exist to increase spending.

The benefit to having money is to enjoy the fruits of prior labor. Keeping living frugal can also help keep investors emotionally grounded during periods of poor market returns.

Keeping a frugal mindset also helps to avoid trading and other activities that incur fees and taxes. Reducing taxes is often an investor’s biggest expense. Using tax-advantaged accounts is one way that investors can set themselves up for better total returns.

For the full list on ways to live frugally and build wealth, click here.