Building Wealth Starts With Getting in the Game

By Kissu Kirkwood

Op-Ed

When we talk about financial literacy in our community, I believe we have to move beyond simply talking about saving money. We have to start talking about owning assets. For generations, many of us were taught to work hard, pay our bills, put some money in the bank and hopefully have something left over. Those are good habits—but saving alone is not a complete wealth-building strategy.

One of the simplest steps toward building long-term wealth is opening a brokerage account and learning how to invest in quality companies, exchange-traded funds (ETFs) and other investments. You do not have to be wealthy to begin investing. In fact, investing is one of the tools that can help you build wealth in the first place.

One platform I personally recommend people consider is E*TRADE from Morgan Stanley. A standard brokerage account gives you the ability to purchase investments such as stocks, ETFs, mutual funds and bonds. More importantly, opening the account puts you in position to become an owner, not simply a consumer.

Think about the companies whose products and services we use every day. Many of them are publicly traded companies. Instead of only spending our money with successful businesses, financial literacy teaches us to consider owning a piece of successful businesses as well. Investing involves risk, and there are no guaranteed returns, so the goal is not to gamble, chase the hottest stock or get rich overnight. The goal is to learn, invest consistently and think long-term.

I also strongly encourage people who have earned income to educate themselves about opening an Individual Retirement Account, or IRA. Depending on your circumstances, that might be a traditional IRA or a Roth IRA. What many people don’t realize is that an IRA isn’t simply a place where money sits until retirement.

An IRA can be opened through a brokerage firm such as E*TRADE, and you can direct how the money inside that account is invested among the investments available to you. That means your retirement contributions can potentially be invested in stocks, ETFs, mutual funds, bonds and other eligible investments. Traditional and Roth IRAs have different tax rules, eligibility requirements and contribution limitations, so talk with a qualified tax or financial professional about which one makes sense for you.

But opening an account isn’t enough. The real power is consistency. Once your brokerage account is established, connect it to your bank account and create an automatic weekly or monthly contribution that fits your budget. It might be $25 a week, $50 a week, $100 a month or considerably more. The number isn’t the most important part in the beginning—the habit is.

Treat investing the same way you treat your phone bill, rent or another obligation. Automate it. Pay yourself before you find another reason to spend the money. Over time, consistently investing and reinvesting your earnings gives compound growth an opportunity to work for you. There will be good markets and bad markets, and investment values will fluctuate, but wealth building is a long-term process.

Here’s your action plan:

1. Go to the official E*TRADE from Morgan Stanley website and select Open an Account.
2. Open an individual brokerage account for your regular investing.
3. Consider opening a traditional IRA or Roth IRA for retirement investing after reviewing which account fits your financial and tax situation.
4. Connect your checking or savings account to your brokerage account.
5. Establish an automatic weekly or monthly transfer that you can realistically maintain.
6. Learn the basics of stocks, ETFs, diversification, risk and long-term investing before putting your money to work.
7. Review your investments regularly—but don’t confuse investing with constantly trading.

Financial literacy isn’t just about knowing what money is. It’s about knowing what money can do. We have to teach ourselves and our children that every dollar has a job. Some dollars pay bills. Some dollars provide experiences. Some dollars should be saved for emergencies. But some of our dollars need to go to work building our future.

You don’t need $100,000 to start. You need an account, a plan, some education and the discipline to consistently invest. The best time to start building wealth may have been years ago. The next best time is now.

This column is for general education and is not individual financial advice. Investing involves risk, including loss of principal. Op-ed pieces reflect the views of their authors, not necessarily those of The Sun-Reporter.