Although the general economy in North America was quite healthy in 2018, it was a challenging year for both equity and bond investors as the S&P and TSX both had negative years.  If you have a traditional bond and equity portfolio, regardless of the percentage mix of each, it’s likely your portfolio lost money in 2018. In fact, the only sector that actually performed in positive territory in 2018 was cash and/or cash equivalents.

I’ve always been rather light in both equities and bonds in my overall portfolio, however, and even still,  I was somewhat concerned about the state of the markets, and what that would foretell for the upcoming year.  I’m an avid reader of business and financial papers, and it seems that for every writer that believes that 2019 will be a strong positive year, there are equally as many prognosticators who believe that it will be a negative year and that you should stay away from the markets altogether, and hang on to your cash.

I was speaking with my son the other day. He has some earnings from his summer job last summer that have remained in cash.  He asked me at the end of last summer how he should invest his earnings, and I told him to hang on for the next few months, and I would tell him when the timing was better to enter the markets.

I told him a couple of weeks ago, with the markets down more than 15%, that the timing was now better to get into the equity markets, however, I suggested that he divide his cash as follows: 75% into equities and 25% in bonds (he’s still young) and that he should break his equity purchases into 4 equal buys over the course of the next year.

Regardless, there’s the old adage, it’s not timing the markets, it’s time in the markets.  It’s very difficult to create wealth by buying and selling, in fact, if you try to time the markets, there’s a good chance that you’ll not only drive yourself crazy, but, worse, you’ll miss the market’s biggest up days, like the 1,086 advance on December 26th, 2018.

With that in mind, and as we prepare for 2019, let’s review whether you’re on track to create wealth this year.

So, how did you do in 2018 in regards to building your wealth, and what’s your plan in terms of building wealth in 2019?

I have a five-step plan to help you build your wealth, and if you’re currently not following any (and all) of these 5 steps, then let’s make a 2019 New Year’s resolution that beginning today, you’ll work on growing your wealth by following these 5 steps:



A single number on its own, as far as I’m concerned, is generally meaningless. A number, in the context of a string of numbers and an established goal, tracked over a long period, not only provides history but, more importantly, makes it easier to reach your goal.

So when I ask the question, “How did you do in 2018 in regards to building wealth?” and then, “What is your goal?” it’s important that you know the answer to both questions, and if you’re not tracking, or planning, then you’ll never reach your goal.

There’s an expression I’ve shared with you in the past: “If you don’t have a dream, you’ll never have a dream come true.”

Your life might be awesome, and you might be accomplishing all sorts of financial and career milestones, but in the absence of a dream (and goal), how do you know where you’re aiming, and then when you do hit the mark, how do you know that you hit the mark?

You need a baseline and a goal.

What is your current level of wealth? How did you do in 2018? What is your 2019 goal?

If you don’t currently have a separate Excel sheet, or a program like Personal Capital, to track your wealth, then start now. You need to know:

– how much you’re saving and spending on a weekly and monthly basis
– how your investments are doing
– what your overall level of growth has been in the last 12, 24, 36 … months

Once you have a baseline and understand how much you’re spending and saving, then you’re in a better position to establish and meet your financial goals.


What is your 2019 goal? Like the “if you don’t have a dream” quote above, what level of wealth are you trying to achieve in 2019, 2020, and beyond?

If you’re currently 30 years old and have $100,000 to your name, and your goal is to have $1 million by the time you’re 50, then you need to sharpen and more carefully detail your financial goals.

Let’s put the following numbers into an Excel document:

Column 1: your age (start with your current age in the first row)
Column 2: the year
Column 3: your current level of wealth (e.g., $100,000)
Column 4: the assumed return on investment of your liquid assets (e.g., $8,000 this year, assuming an 8% return)
Column 5: the total amount you added to your wealth in the assumed year (e.g., if you save $800 a month, then you’ll have $9,600 in this column)
Column 6: the total wealth in the year (In this case, it will be $100,000 + $8,000 + $9,600 = $117,600.)

Then keep filling in the rows with subsequent years. NOTE: the starting number in the second year would be $117,600 in our example.

Now that you’re tracking, you need a plan. In the case I mentioned above, if you started with $100,000, and your goal is to have $1,000,000 by the time you’re 50, then with the Excel document filled in, you’ll be able to determine whether you’ll achieve your goal.

So, establish a financial goal, and then track your goal on a yearly or, even more preferable, a monthly basis.


Do you have a spending problem?

The same thing that plagues most businesses, the lack of a budget, spending on unnecessary business expenses, not tracking profitability, is the same thing that plagues most individuals.

Just as I advocate for saving a certain percentage of your business’s revenues in a separate account, I also advocate that you take a certain percentage of your salary, or business’s profits, (let’s say 10% of your salary or revenue as a low water mark) and have that amount removed automatically from your bank account on a monthly basis.


It’s now time to put your saved dollars into an investment account, one that you’ll never touch, with the exception of either a dire emergency or to invest into an appreciating asset (like stocks, bonds, or real estate, for example).

A car is not an investment. It’s an expense.

A vacation is not an investment. It’s an expense.

A stock (buying Berkshire Hathaway for example) or the S&P index fund IS an investment.

Buying a triplex, renting out the top and bottom floors while you live in one of the units, is ABSOLUTELY an investment.

Starting a business is ABSOLUTELY an investment. In fact, starting a business might likely be the single best contributor to overall wealth creation available. Is this in your 2019 plans?

You need to invest into an appreciating asset, one that produces a dividend, yield, increase in value, or a return on your investment and that will contribute toward building your wealth.


Some suggest that 8% a year is a good return on investment, and if you’re managing to get 8% a year, consistently, year over year, then you’re doing well.

BUT 8% ain’t great.

If you’re saving 10% of your salary and growing your overall wealth by 8% a year, then over time, you’ll build your wealth.

How about a 15%, 25%, or even 30% year-over-year compounded return for many years?

The power of compounding your wealth by 20%, year over year, means that if you start with $50,000 in year 1, by year 10 you’ll have $309,587, and by year 20 you’ll have $1,916,880!

And how can you achieve a 20%, 30%, or even greater year-over-year compounded return?

By starting and growing a profitable business, and by reinvesting the business’s profits:
– back into the business for further growth, and
– in investment real estate

The New York Times, using data from 2007, estimated it took $8.4 million in net assets to be in the top 1%, compared to $121,000 average wealth for all Americans.

That article states, “The wealthiest 1 percent took in about 16 percent of overall income—8 percent of the money earned from salaries and wages, but 36 percent of the income earned from self-employment.”

This strongly implies that a large percentage of the 1% are self-employed, which is probably a good gauge of being “self-made.”

Whether your financial goal is to make it into the top 1%, or a more modest number, you need to begin by tracking, planning, saving, investing, and growing your wealth. Let 2019 be the year you take hold of your financial well-being.

Good luck,

Before you go, I think you might be interested in reading this post: Do you Have the Most Important Trait Required to Become a Millionaire?

And here’s another:  Are You Really Cut out to Be Rich? The Average Net Worth to Make it Into the Top 1% and How to Get There


Are you a younger entrepreneur? Here’s another interesting article I wrote:

My Response to an 18-Year-Old Who Wants to Become a Millionaire by the Time He’s 30.

My goal is to help entrepreneurs scale their business, improve profitability, and then, use those profits to create massive wealth. Subscribe to my blog to receive my latest thought on scaling your business and creating wealth.

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