Top Money Advice for When You’re Doing Well Financially
You’ve got a good job. You’ve saved a significant amount. All things considered, you’re doing pretty well financially. What more could you be doing? How could you enrich your financial portfolio even more?
The good news is that it’s always easier to make money when you’re in a position of wealth. The hard part is determining what is worth your time and investment. GOBankingRates spoke with financial experts to get the best recommendations for what you should do with your money when you have flexibility and a large amount of disposable income.
1. Spread Your Knowledge
Financial literacy is not something widely taught in our country. In fact, a GOBankingRates survey showed that 76% of Americans believe that high schools are very much lacking when it comes to financial education. If you’ve been lucky enough to achieve financial wellness, Radhika Duggal, Chief Marketing Officer at Snapcommerce, recommends finding a way that you can educate others on how to get there, too. “Sharing your story and specifically, the tactics that enabled you to get to a good place with money is invaluable to those who are looking to build wealth.”
Duggal said you can do this by partnering with a local nonprofit to host a seminar or share your story. Or, you can write a blog that helps others understand money better. If you have children, Duggal said you can start teaching them the value of a dollar early by opening up a bank account for them to teach them about saving and potentially investing. “Whatever you do, share how you built financial health so that others can learn, emulate you, and get where you are,” Duggal said.
2. Avoid Being Conservative with Investments
If you have money, you’re probably cautious about how you spend it, but Lyle Solomon, Principal Attorney at Oak View Law Group, suggested being a little more daring with how you use your money. “If you want to create enormous amounts of money, you must be willing to take certain risks in your financial life, such as investing more aggressively or establishing your own business.” In addition to stocks and heading up your own venture, Solomon said real estate and even some cryptocurrencies carry a lot of risk, but can be very rewarding for your financial portfolio.
3. Don’t Stop Adding to an Emergency Fund
The recommended amount to have saved up is enough to live off for six months, should you lose all your sources of income. Even if you have that amount in the bank, Shaun Connell, the founder of Credit Building Tips, said you should still continue to add to it. “Although many people might do well financially, they might not have an emergency fund in place that is strictly for emergency purposes.” Plus, while your money is in a savings account, it’s earning interest, so you’re building that much more wealth.
4. Steer Clear of “Lifestyle Inflation”
Mila Garcia, Co-founder of iPaydayLoans, described “lifestyle inflation” as the need to spend more money once you earn more money. Garcia said this is one of the biggest obstacles to growing wealth, and it should be avoided. “If you can simply manage to keep your expenses and purchases low, even with that extra income, you can drastically increase your cash flow and give yourself an ample nest egg, which you can then use to invest and generate a passive income stream. And this, in turn, is what will eventually lead you to financial independence even faster.”
5. Find Tax Advantages
Considerable wealth means your taxes will be higher, but there also might be some advantages for you as well, even in a recession, according to Ryan McCarty is the CEO of McCarty Money Matters. McCarty recommended Roth conversions on existing assets. McCarty also said you can harvest losses in taxable accounts to lower income tax burdens. Depending on how much money you’re working with, you can even go a step further. “If you have considerable wealth, consider estate planning early and often as the world changes.” McCarty said.
6. Learn a New Skill
More money might come with more time. According to James Angel, the Co-Founder of DYL, one of the best ways to use that time is to expand your repertoire, so you can potentially earn even more money. “Study and hone a marketable skill set so you can potentially earn a higher wage and increase your income over time. Long-term thinking is your friend when it comes to money. When you develop and grow your own discipline, it grows and builds wealth in the same way that a financial strategy does.”
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