Wall Street veteran shares tips on building wealth in times of economic turmoil

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Getting started with investing can feel overwhelming, but one Wall Street veteran has advice on how to secure your footing in the market.

According to Ashley Fox, a former Wall Street analyst and founder of fintech startup Empify, successfully growing wealth boils down to two things: “You can invest in your own idea or invest in somebody else’s idea.”

“Now, I’m not telling everybody to go build a business because … I’ve been through a whole lot to get to the point of where I am in business,” Fox said on a new episode of Yahoo Finance’s Financial Freestyle podcast (see video above or listen below). “But it doesn’t mean you can’t invest in somebody else’s idea.”

Though securing a well-paying job was once an easy avenue to wealth building, Fox admitted that it’s no longer that simple. For those who don’t feel confident enough to invest in their own ideas, investing in others is a great way to diversify your streams of income.

“Times are completely different, and you don’t have to rely on just one role or one job to give you a stream of income,” Fox said. “There are ways that you can effectively build wealth, and you cannot work your way to wealth or save your way to wealth.”

When beginning to build an investment portfolio, the first thing new investors often do is evaluate their risk tolerance. Growth stocks tend to be shares of fast-growing companies that seem lucrative, but investors should assess the stock’s long-term durability.

For those with a lower tolerance for risk, it’s still possible to bring in a passive income from dividends by investing in more seasoned companies whose stocks might not be as volatile.

“There are companies that share 40%, 50%, 60%, 70%, 80% of their profits and give it to investors, that everyday person, every month or every quarter,” Fox explained. “And while you’re not going to get rich quick, you are able to build a sustainable income that can put you through retirement, that can help you replace your job’s income, can help you pay off debt, travel the world.”

An investor doesn’t have to trade constantly to see consistent dividends — and finding a few steady stocks can actually be the key to creating a passive income from investments.

“Some of the biggest and best companies have been paying out dividends for 20, 30, 40, 50 years, and people are retired with this income,” she said. “And so dividend income, creating that passive income by investing in things like dividend stocks, … dividend ETFs, …[and] real estate investment trusts allow people to get in, not have to start with a lot of money, but be able to build over time” without using a credit score or putting in a bunch of work.

At a time when the market feels particularly volatile, there are also certain precautions new investors can take to make sure the stocks they’re putting their money into will provide them with consistent and stable returns.

For instance, looking at a company’s historical returns, especially during periods of economic downturn, can help investors understand if their investments could weather a possible recession.

“The best time to go shopping is when the market is down,” Fox said. “The best time to learn how to invest is when the market is down. This is not the time to be scared.”

Every Monday, Financial Freestyle host Ross Mac talks with key guests to discuss their wealth-building journeys and what it takes to build a lasting financial footprint. You can find more episodes on our video hub or watch on your preferred streaming service.