4 Money Mistakes the Wealthy Never Make
Written by
Adam Palasciano
Edited by
Gary Dudak
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It should come as no surprise that wealthy people — or people striving to join them — are constantly paying close attention to the economy, legislation and various markets. They are also always analyzing how these factors can and will affect their finances.
Here are four financial mistakes the wealthy never make whether times are tough or relatively smooth sailing.
Not Speaking With a Financial Advisor
The wealthy understand the importance of careful financial planning and management. That’s why they always consult with a financial advisor ahead of a potential political or economic shifts.
An experienced professional can help you navigate the ins and outs of complicated tax laws and help you make the smartest financial decisions — so you can keep more of your money.
Not Diversifying Their Portfolios
Diversification is key when it comes to a well-balanced portfolio. This is especially true when there’s about to be a new president.
A new administration may have positive impacts on some of your investments, while it may adversely impact other parts of your portfolio. Ensuring a healthy and strategic investment mix is crucial to hedge against financial loss.
Not Taking Advantage of Tax-Advantaged Accounts
The wealthy always search for ways to reduce their taxes. One smart way to do so is to put your money in a tax-advantaged savings account. These include 401(k)s, health savings accounts (HSAs) and more.
By depositing and investing your money in accounts like these, you’ll effectively reduce your taxable income now and defer taxes until later in life. This is a smart decision, especially if a new administration means higher tax rates for the wealthiest Americans.
Not Planning Their Estates
A Trump presidency will likely mean an extension of the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered the highest tax rates.
The legislation is slated to expire at the end of 2025 if Congress doesn’t act to extend it or pass a new tax bill. One key provision of the TCJA (which served the wealthiest Americans) was an increase in the per-person estate and gift tax exemption. The exemption increased from $5.5 million in 2017 to $13.6 million in 2024. This has allowed wealthy Americans to leave more of their estates to their next of kin tax-free.
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