Everyone gets this wrong about building wealth

12 snips

May 20, 2024

Financial Advisor Chris Bourne debunks common beliefs on wealth building, emphasizing personalized financial planning. Topics include tax-efficient strategies, cognitive biases in investing, starting the wealth-building process, redefining financial planning beyond the 4% rule, optimizing tax efficiency, and exploring benefits of pensions and ISAs.

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INSIGHT

Value Creation over Cost-Cutting

Focus on creating value, not just cutting consumption to build wealth.
Adding value to many lives is more effective than strict budgeting.

INSIGHT

Active vs. Passive Investing

Index funds are generally best for efficient markets like the US.
Active investing can be valuable in emerging or fixed-income markets where inefficiencies exist.

ADVICE

Beyond the 4% Rule

The 4% rule is too generic and doesn't account for individual circumstances.
Use a cash flow model that considers your income, expenses, and other factors.

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Can you really get rich by cutting costs? Is the 4% rule right for everyone? What are the biggest mistakes we make when it comes to tax? Chris Bourne has worked in the finance industry for over 20 years and is a personal finance YouTuber. We got him on to talk about our biggest misconceptions about building wealth and how we can do it in the most tax efficient way.

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This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.