5 factors in wealth accumulation

Here's a helpful article from Liz Weston on MSN: 5 ways to get rich...or poor

Are you convinced the reason you can't save is that you don't make enough money? You're probably deluding yourself.

Income differences don't explain why some households accumulate wealth and some don't. Ivy League researchers Steven F. Venti and David A. Wise found that some high-income people wind up with little wealth and that some low-income people accumulate a lot.

A study of 3,992 households whose heads were near retirement age found income differences explained just 5% of the variations in wealth. Life events such as inheritances, big medical bills, divorce and the number of children accounted for just 4%. Investment choices accounted for 8%.

So what made the most difference? How much the households chose to save. Even some of the lowest-income households managed to accumulate significant wealth.

The takeaway. Making savings a priority, and paying yourself first from every check you get, turns out to be the No. 1 way to build wealth. So get started. For more, read Trent Hamm's wonderful post "12 excuses for being broke."