Five Steps to Help You Build an Investment Portfolio

Five Steps to Help You Build an Investment Portfolio

Building an investment portfolio is an achievable goal if approached thoughtfully and methodically. Here are five steps to help you get started:

1. Start with a Goal – and Build a Habit

Investing requires discipline, and you’re more likely to succeed if you establish it as a habit now. Start by identifying a goal that motivates you. Whether it’s funding your children’s education, planning for retirement, or taking a dream vacation, your objective will help keep you focused.

When challenges arise—and they will—don’t let setbacks derail your progress. Be kind to yourself and set realistic, incremental goals. Over time, the habit of investing will become second nature.

2. Be Spending Savvy

If you’re struggling to stretch your income, take a closer look at your spending habits. Review your receipts or credit card statements to identify unnecessary expenses. Small changes, such as sticking to a grocery list, can make a big difference.

Consider adopting the “50-30-20 rule” to structure your budget:

3. Pay Down High-Interest Debt

High-interest debt can significantly impede your ability to invest. In the first quarter of 2024, delinquency rates rose on various loans, with approximately 8.9% of credit card balances and 7.9% of auto loans transitioning into delinquency.

Credit card interest rates often range from 21% to 28%, and new car loans average about 7%. Reducing or eliminating this debt is essential before focusing on investing. This may require changes such as reducing discretionary spending, using a more economical vehicle, or even cutting up your credit card.¹

4. Differentiate Between Wants and Needs

Learning to delay gratification can improve your financial outcomes. Walter Mischel’s famous 1970 experiment, known as the "Marshmallow Test," demonstrated that children who delayed gratification tended to experience better life outcomes.

When deciding how to allocate your funds, consider whether a purchase is a need or simply a want. By avoiding unnecessary expenses today, you can allocate more funds toward your investments tomorrow.

5. Choose an Investment Product You Understand

As Warren Buffett wisely advised, “Never invest in a business you cannot understand.” If you’re new to investing, ask questions and ensure you fully understand the products you’re considering. The Federal Trade Commission offers guidance to help investors avoid scams.

Accretive Wealthcare Fund provides an opportunity to invest in healthcare real estate. While it is exempt from certain SEC registration requirements under Regulation A, it still files publicly available documents through the SEC’s EDGAR database ². If you don’t understand these documents, consult a trusted advisor or contact us for clarification.

You can reach us via the chat feature on the bottom right of our website, email support@accretivusa.com or call +1 (212) 485 9831.

Keep in mind that overly conservative products, such as savings accounts with minimal interest, may not grow your portfolio enough to outpace inflation over time. The goal is to achieve a real return—a return that exceeds inflation and helps build wealth in the long term.

References:

https://www.newyorkfed.org/microeconomics/hhdc
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0002044436&owner=include&count=40&hidefilings=0