Navigating the 3 Greatest Roadblocks to Wealth
When you’re not in control of your money, your money controls you. By protecting yourself against the three threats to wealth, you can significantly improve your financial wellbeing. The three biggest issues that can negatively impact your wealth are lifestyle spending, inflation and taxation. Here are some tips on how to navigate these threats, so you can enhance your financial future:
Control Your Lifestyle Spending.
Lifestyle spending is where you have the most control and can make the greatest change. It’s important to know exactly where your money is going. Setting a budget is key. But don’t make the mistake of thinking your income equals your budget. Your budget should be built around your expenses. To gain better control of how you spend your money, carefully monitor and track all of your expenses. You can easily track this using a budgeting spreadsheet or even a budgeting app. After you’ve tracked everything, figure out a budget and be disciplined about it. Afterall, having a spending plan is pointless if you don’t stick to it. By budgeting your expenses and forecasting your income, you’ll make great strides in boosting your financial health.
Offset Inflation.
Simply defined, inflation is the general increase in prices combined with a decline in purchasing value of the dollar. Inflation impacts us all, and while you may not be able to control it, you can prevent it from destroying your wealth. Offset inflation by investing in good businesses with low capital needs. Fixed assets, like real estate, are an excellent investment. Look for companies that can raise prices during periods of higher inflation. Last but not least – invest in yourself! Strive to constantly learn and grow and be the best at what you do.
Navigate Taxation.
Taxes are unavoidable, but there are ways to minimize what you owe. Navigate taxation by finding tax policies that work in your favor. Funding your retirement is a great tax-saving strategy, whether it’s a 401(k), SEP IRA, or Roth IRA. You can also use a Health Savings Account (HSA) to reduce taxes. With an HSA, you’re able to write off your contributions for the year, reducing your taxable income. Explore and become more aware of the various tax credits that you can take advantage of. Additionally, having a will or trust minimizes your tax exposure.
When trying to boost your net worth, knowing what the biggest financial roadblocks are and how to navigate them is key. To learn even more about navigating the three threats to wealth and how you can take control your financial future, watch this Facebook Live with Brian Buffini.
