Once I was asked in an interview with Smart Money magazine about the single most important factor effecting investment success. I told the reporter that committing to and following a sound, long-term investment strategy is the key to success. Sounds simple, right? Yet, most investors can’t describe their strategy because they simply don’t have one. Far too many people invest a little here and a little there based on what they’ve read or who they’ve talked too recently. They often bail out of the stock market after it has tanked. Or they buy real estate after they’ve had a great run. Or they invest in the latest hot product being promoted by brokers and financial planners.

Then, of course, there’s the recent “follow the newsletter” trend. Every year, Hulbert Financial Digest ranks the performance of investment newsletters. According to Hulbert, many investors have started basing their investments on the advice found in last year’s top-ranked newsletter. On the surface, it seems like a good idea. You’re following the advice of a proven winner, right? And it feels good to follow a winner. The only problem is that like most “feel good” decisions in the investment world, it doesn’t work. At all. If you had taken $1,000,000 in 1985 and followed this brilliant strategy every year for the next 21 years, you would have a whopping grand total of $365 today. That’s an average loss of 31.4% per year. The moral of this story should be fairly clear: Twelve-month track records are an absolutely horrible guide to which advisors will perform well over the long term.

So what are the keys to a sound strategy for building wealth? Any successful investment strategy must:

• Work over different time frames
• Provide effective diversification-not just diversification for diversification’s sake
• Work in both bull and bear markets
• Be disciplined yet flexible and evolving
• Reduce risk and provide downside protection
• Have a good long term track record

After you develop a strategy that meets these criteria, it’s all about patience, self control, patience, and more patience. In order to help more people and make a greater impact on the causes that you are passionate about – you need money. The more financially sound you are the greater impact you can have, the more you can donate to charities your passionate about, the more you can give back to people in need and the more free time you will have to pursue the causes that you are important to you. The more you give, the more you receive. From my experience, this is a fundamental truth. Giving back, whether of your time or money, has an energy about it that changes lives and creates happiness.