There Are A Lot Of Misconceptions About Wealth Creation: Wealth Advisor Ron Malhotra

Have you ever wondered what makes a great investor different? A great investor knows how to differentiate between myths and realities concerning long-term wealth creation. There are a lot of theories prevalent in the world, and a lot of false propaganda has been spread about investing money to create wealth. Unfortunately, most of them are flat out lies, or simply hold no weight, yet people tend to get influenced by these false news claims resulting in them failing to meet their investment goals.

Many seasoned investors have also fallen for these lies, and undertaken decisions which have cost them a fortune. From time to time, people have followed the wrong path, resulting in major wrong decisions working against them. There has been a lack of proper guidance to help these people make the right decisions when it comes to their investing and creation of long-term wealth. But now they can heave a sigh of relief as Ron Malhotra, an award-winning wealth advisor, is here to break down the top myths that prevent people from creating wealth.

There are many myths, which according to Ron, play a big role in halting the financial growth of people. He mentions these myths below:

Myth 1 – High income guarantees wealth creation.

Making humongous amounts of money doesn't necessarily result in long-term wealth creation. We have many examples of people earning high incomes, but at the end of the day, they were left with no or minimal wealth, because they had no plans or financial goals. Their inability to grow wealth stops them from keeping even a fraction of what they earned over their entire career. Some examples include Mike Tyson, Dan Marino, Evander Holyfield and MC Hammer. The point is crystal clear, higher incomes don’t necessarily result in financial wealth.

Myth 2 – One can create and multiply wealth without proper planning.

We have seen many people lose their fortunes, as they had no robust financial plan in place. They made significant amounts of wealth, but were unable to sustain it due to the lack of proper financial planning, resulting in them losing it all over time. One fine example is that of Michael Carroll who won 9.7 million pounds in the British lottery. He was declared bankrupt within 5 years. Another example is Bud Post who won 16.2 million dollars, but fell into the trap of accumulating massive debts within a couple of years. The point is, even if you receive huge amounts by way of inheritance or lottery wins, there is no surety that wealth will withstand time without a proper financial plan.

Myth 3 – Market crashes wipe out investors’ wealth.

It’s not the falling markets that affect investors’ wealth creation, but the wrong investments that are either speculative in nature, or heavily concentrated, and that lack diversification. Smart investors know that market crashes are temporary and normal, and they are not the reason for the erosion of financial wealth. Not having a diversified portfolio of quality investments, not having sufficient liquidity and succumbing to emotions, are the major reasons for one’s wealth being wiped out during market crashes.

Myth 4 – Keeping a tab on markets and staying updated on financial news, makes you a smart investor.

The news channels, magazines and financial journals are in the business of selling news and are not in the business of empowering investors with the right knowledge on investing. Unfortunately, when people follow their tips and advice without considering their own plan, they increase the chances of losing their wealth. One needs to do their own homework and be disciplined in their approach, rather than relying on financial news, because the media is not accountable or responsible for your financial future.

"It’s best to avoid bad decisions to minimize risk when it comes to investing, and once an investor is able to read through the lines and understand the facts and principles around wealth creation, instead of following the prevalent myths and trends, they will be in a better position to secure long-term financial success," concludes Ron.