Money magazine asked its readers over 50 what is the most effective way to build wealth. The results:
- 74% - Consistent saving
- 10% - Savvy investing
Anyone surprised? Not me.
In fact, it's not only the opinion of these readers that saving more is the best way to maximize your wealth, but the numbers prove it out as well. As I noted in The Best Way to Maximize Your Investment Return the key to growing your wealth is saving as much as you can for as long as you can.
And yet personal finance publications, radio shows, TV shows and the like spend the vast majority of their time and effort on investment return. I guess it's because it's more glamorous, but it's not the most effective way to grow your net worth.
Thank goodness that's the case. Because it's a lot easier to save over time than it is to improve investment return. That and the fact that most people aren't able to increase their investment return -- but everyone can work to save more.