The man responsible for the finances of NYC's richest millennials details the road to mastering and growing your wealth in 3 simple steps

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The man responsible for the finances of NYC's richest millennials details the road to mastering and growing your wealth in 3 simple steps

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Reuters / Mario Anzuoni

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  • Douglas Boneparth, president of adviser Bone Fide Wealth - which caters to rich millennial clients - shares timeless advice for anyone looking to pave a way towards financial freedom.
  • Boneparth details a systematic, disciplined way to accumulate and grow your wealth.
  • Only after an individual has identified, quantified, and prioritized their goals can they master their cashflow and earn the right to invest, Boneparth says.
  • Click here for more BI Prime stories.

Getting your financial house in order is no small endeavor - especially if you're a millennial.

Those in the millennial cohort - born between 1981 and 1996 - are in the midst of one of the most capricious times of their lives. Between college, babies, home ownership, and careers, it's hard to find time to devote to a financial plan.

Couple these factors with burgeoning levels of student-loan debt, and planning for the future looks more like a dream than a reality.

That's where Douglas Boneparth, president of Bone Fide Wealth comes in. He's detailed the road to mastering and growing wealth, built on timeless advice.

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Boneparth caters to NYC's affluent millennials - or those with incomes ranging from $400,000 to $1.2 million - but the lessons and values he shares are applicable to anyone looking to get their finances in order.

He breaks it down into three simple steps: Define a system, master your cashflow, and earn the right to invest. Here are details around each:

(1) Define a system

Boneparth breaks down this easy-to-deploy methodology into three sub-categories: identify, quantify, and prioritize.

Identify

"The first thing you need is a system for your goals," he said on Millennial Investing by the Investor's Podcast Network. "What do you want for yourself? What great things in life? Is it a house? Is it retirement? Is it to sleep well at night with a cash reserve? Do you want a boat? It's your life, you figure it out."

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He continued: "The sooner you figure it out, the sooner you can start attacking them."

Read more: Dyslexic, failing at school, and partially blind: How Larry Hite overcame the odds to become one of the most successful self-made stock traders using a strategy that's 'accessible to anybody'

The identification step lays the groundwork for the rest of Boneparth's thesis. Without identifying goals, you have nothing to aim at. No North Star. It's akin to wandering around aimlessly and hoping to one day arrive at financial freedom. Unfortunately, it doesn't work like that.

Quantify

Boneparth breaks down this step into two parts: how much and when.

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"How much is that goal worth? If it's a house, well how much is that house? And then quantify by time," he said. "Now you got a timeline on it, and now you know how much it's going to take to get there."

This step will clearly vary for different individuals, but the overarching message reigns true. It's purpose is to systematize and discipline the way you think about your goals and what it will take to reach them.

Prioritize

The completion of this step lets an individual know exactly what to focus on, and it requires hard work. Boneparth is quick to demonstrate the fickleness of life, and knows that things can change quickly. However, sound prioritization makes transitions much smoother and easier to cope with.

"Prioritization of your goals means your honest about which of your goals are most important to you," he said "Because more than likely, your income and ability to save is limited and if you have multiple goals you're not going to be able to do all of them right now."

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Once you've identified, quantified, and prioritized your goals, it's time for the next step.

(2) Master your cash flow

Boneparth refers to this as the "least sexy" part of personal finance, but also "the most powerful part."

In broad strokes, this step requires you to go back anywhere and look at six to 12 months worth of expenses and categorize them. This way, you'll know exactly where your money is going. He mentions budgeting platforms like Mint, Tiller, and the old faithful - Microsoft Excel - to help with the endeavor.

Read more: Why a $60 billion investing firm thinks unloved value stocks represent the best market opportunity in 20 years

Once you've identified and categorized your spending, it's time to make a budget. You take the data you've collected from the first portion, and apply it going forward.

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"This is intimately understanding how money goes in and out of your life," he said. "What that should show you and get you to is consistently saving towards the goals that you've already defined."

(3) Earn the right to invest

This is the final piece of the puzzle - and Boneparth's phrasing speaks volumes about his philosophy.

You have to earn it. Without mastering the other steps, you're not ready to put money at risk. You're not adequately prepared.

"Then, once you've built a cash reserve - three to six months of your living expenses - once you do all of these things I just mentioned, you've earned the right to invest," he said. "That's the road to earning the ability to put risk on your money, and grow your wealth."

He concluded: "Nothing will really stop you in your pursuit of accumulating your wealth if you've mastered and have done all of those steps before."

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