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Ignore the scammers and retire rich instead

The Australian Competition & Consumer Commission this morning — again unfortunately – has issued a press release reminding the public to be wary of the many scammers and financial rogues out there doing their best to part you with your money.

If you’re unlucky enough to receive unsolicited calls offering you high returns, a free ‘review’ of your investments, or a helping hand with your superannuation, slam down the phone … fast.

In my past, I can recall a number of cold-calls that promised me 50%+ per month returns, trading software that would tell me exactly at which minute of the day to buy and sell shares and hence guarantee my prosperity, and amazing property deals which could only be sourced through them.

Resisting the allure of quick wealth, though, is essential.

I refused all of these offers and, over my last 23 years, I’ve stuck to the tried-and-tested method of wealth-building by saving methodically over time and investing these savings into growing profitable businesses — without the use of gearing or leverage.

Growing one’s wealth therefore is a process that doesn’t have to be sophisticated or troublesome.

If you can thwart the siren call of ‘instant wealth’ then you’ll find yourself in a good place to start a savings and investment strategy if you haven’t commenced one already.

You could:

  • Read up on investing, and for beginners, there’s no better place to start than with The 13 Steps To Financial Freedom,
  • Begin taking an interest in your superannuation and understanding first what investment options your fund is offering you. If you’re young, then take the shares-based option to give you every chance of growing your wealth over the very long term [if you’re not-so-young, still consider the shares-based option and understand why this might still be good for you],
  • Start, or continue, salary-sacrificing into super — but ensure your employer contributions and what you contribute pre-tax is less than $25,000 per financial year,
  • Invest a small sum of money into an index fund, something like the Vanguard Australian Shares Index Fund, known as V300AEQ ETF UNITS (ASX: VAS), or the iShares Global 100 ETF [ISGL100ETF CDI 1:1 (ASX: IOO)] which gives the investor a broad exposure to large international companies in a single security,
  • Continue your investing education by considering a few of our book recommendations,
  • Place a small amount of your savings into your first stock and learn as much as you can about the business, whether that be long-term performers like Brickworks Limited (ASX: BKW) or Technology One Limited (ASX: TNE), and
  • Continue setting aside savings, and dividends as they come in, to ensure you’re able to continue the process for many years

I started investing in January 1994, at the height of a share and bond market peak, and subsequently saw my investment fall in value over the following 12 months.

But, prior to investing, I had read enough to understand that any investments I would make would genuinely be for the years and decades ahead.

I avoided the stock-trading software and continued buying shares throughout my adult life, even if they were tiny amounts.

Founder-led companies like ARB Corporation Limited (ASX: ARB), Reece Ltd (ASX: REH) and 1300 Smiles Limited (ASX: ONT) have served me well over the years and I expect to continue holding shares in these businesses for a long time to come as they increase their dividends year-in and year-out.

Buying shares in these businesses has certainly been a better investment strategy than putting my name on the dotted line at a property investment seminar, buying computer software to take advantage of trading ‘opportunities’, or participating in expensive investment courses.

Keep it simple folks

There’s nothing complicated here.

Avoid the scammers and keep improving your, and your loved ones’, financial literacy.

Save and invest.

Buy a portfolio of shares and maintain your equities exposure over the course of your life.

If you’re after some ideas to get you started, then I really don’t think you can go past the five ideas you’ll pick up in the link below.

Rich listers know the power of dividend shares

People who've made a million want reliable returns as much as you do. And when you buy a dividend-paying stock, you're setting yourself up for more reliable gains.

So if you want a blue-chip retirement you better look to some dividend shares rather than the paltry returns offered on term deposits.

Simply click here to learn more about how how to invest in the right dividend-paying stocks.

Motley Fool contributor Edward Vesely owns shares of 1300SMILES Limited, ARB Limited, and Reece Australia Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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