Building Wealth: The 5 Best Investments for the Upper Middle Class
Written by
Martin Dasko
Edited by
Amen Oyiboke
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The way you invest your money will change depending on your income. As your wealth increases, the way that you invest will gradually change. There’s a different investment style for every income bracket. You’re not going to invest your money the same when you’re established in your career as you did with your first job out of college. This is why we reached out to a few financial experts to see their advice for those in the upper middle class regarding building wealth.
What are the best investments for the upper middle class looking to continue building wealth?
Keep On Investing In The Stock Market
You can’t deny the benefits of investing in the stock market. If you’re busy enough with career obligations and your life, you’re going to want to find investments that don’t stress you out. This is why many people will invest in index funds to ensure that their funds are liquid while returning a decent amount. If you’re unsure where to invest, you should always begin with the stock market.
Health Savings Accounts (HSAs)
“HSAs are like a secret weapon for saving,” according to Jeff Rose, CFP® and founder of GoodFinancialCents.com. “They’re triple tax-advantaged: your contributions are tax-deductible, the growth is tax-free, and withdrawals for medical expenses are also tax-free.” If you haven’t invested in one of these accounts yet, you will want to look into it.
If you’ve ever had a health emergency, you understand the importance of having an HSA. By setting aside the funds in one of these accounts, you can pay for qualified medical expenses in the future so that you don’t get into debt to cover the procedure.
Rose concluded with this tip on the benefit of investing your money into a HSA: “Plus, after age 65, you can pull money out for any reason. It’s a smart way to save for medical costs while also growing a little nest egg on the side.” This is a savings instrument that will benefit you in numerous ways.
Online Crowdfunding Real Estate
“Crowdfunding real estate is like pooling money with others to buy into a property or real estate project online,” Rose remarked. “Platforms like Fundrise and RealtyMogul are prime spots for this. They lower the entry barrier, so you don’t need loads of cash to start. Plus, you earn returns from rental income or property appreciation. It’s a modern twist to real estate investing, making it accessible to more people.”
The best part is that this space for crowdfunded real estate has become more competitive, and there are more options than ever for getting started with this investment.
You can get access to exclusive properties, and you don’t have to take the same risks that are involved with traditional real estate.
Some platforms let you invest in other opportunities, like farmland or commercial properties. For example, FarmTogether and FarmFundr, allow you to invest in farmland without ever stepping foot on the space. You invest your funds and monitor the progress online while someone else handles everything from planting to harvesting.
This type of investment also gives you real estate exposure in your portfolio without requiring you to go through the hassle of purchasing a property and finding the right tenants. The toughest part is done for you, and you only have to decide how much you want to invest to get started.
Invest In Professional Help
“One of the best investments for the upper middle class is an investment in professional help,” shared Ryan Janus, the owner of Janus Financial Services. “The truth is, we don’t know what we don’t know, and having someone involved can make a dramatic difference at this point in their financial lives.” Junas put it best here because as your income increases, you will have more money to invest. Instead of getting caught up in figuring out how to manage your money best, it makes sense to hire help for this so that you can focus on your career and other priorities.
“For example, having a proactive, forward-looking tax planning expert in their corner could save them hundreds of thousands of dollars in taxes over the course of their working career and retirement.” Instead of looking at professional help as an expense, it’s important to view it as an investment. You’re investing in your future self.
“This further compounds when you consider the year-over-year earnings on those tax dollars saved.”
Invest In Yourself
“Another great investment for the upper middle class is any investment in themselves,” remarked Junas. “If they work on their public speaking, their written communication skills, their technical expertise, it could give them the ability to earn major promotions in their current lines of work, which could lead to substantial pay increases and a higher savings rate.” If you’re looking to build wealth, you’re going to have to spend some money on yourself to increase your future earning potential. The goal is to invest some money today so that you make much more in the future.
“These two things could have substantially higher rates of return compared to any stock pick, and rather than just hoping their stock pick goes up, it puts the control and outcome into the hands of the investor,” Junas concluded. It’s essential that you constantly look for ways to upgrade your skills and bring in more money to increase our future opportunities.
If you’re looking to invest your money to build wealth, you have numerous options if you’re in the upper middle class. The key is to get started with one investment at a time so that you don’t dilute your focus by putting too much on your plate at once.
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