Three Essential Tips for Building Long-Term Wealth Effectively

Here are the only three things you will ever need to know about building long-term wealth. I'm Tyler, a former financial advisor and portfolio manager, and I now create financial content for free so that you don't have to pay for it.

1. The Impact of Inflation on Savings

If you were to put $50 a week of your hard-earned money into a savings account for the next 30 years, that money will lose 3% of its value annually. In 30 years, it will have the purchasing power of $28,872.

2. High-Yield Savings Accounts

If you were to put the same $50 a week into a high-yield savings account, you'll do slightly better and at least give yourself a chance to keep pace with inflation. That money will have the purchasing power of about $72,000 in 30 years.

3. Investing in Index Funds

If you were to invest that $50 a week instead into a low-cost index fund like Fidelity's FXAIX in a Roth IRA, in 30 years it will most likely be worth about a quarter of a million dollars, and that's after adjusting 3% down for inflation.

Conclusion

So if you're the type of person that says a quarter of a million dollars in 30 years is only gonna have the purchasing power of a dime, well, it will certainly be worth a lot more than the $28,872 that will have the purchasing power of a dollar.

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