How to start building wealth
It’s crucial to leverage the power of compound returns as soon as you can, because if your money isn’t being put to work while you sleep, it’s losing value. While it’s important to have cash set aside for emergency savings or money you’ll use in the short-run, cash isn’t always king. Cash is actually always at risk of deteriorating in value, unless you’ve got it in the right place.
This becomes particularly obvious when we look at the latest US inflation figures and across-the-board price rises. Consumer prices are currently 2.9% higher than last year, which is also 0.9% above the Federal Reserve’s 2.0% inflation target. There are simple ways to make sure you don’t end up surprised and unequipped for those rising costs.
Make sure you bolster those cash reserves
No matter your age or in come level, having emergency funds set asideis especially crucial if you don’t have an inheritance coming your way. Make sure you have enough money set aside for several months of your expenses before you lock any cash away.
But just because you’re setting funds aside doesn’t mean you can’t earn interest on them too. With a high-yield savings account you can watch your money grow, while also being able to access and withdraw it at any time. That makes it much easier to get the cash back into your hands, if you ever should need it.
Wealthfront’s cash account is currently offering a highly-competitive interest rate of 5.00% APY. With up to $8M FDIC insurance, your cash can accumulate in value at no risk when it’s just sitting in the account.
For instance, if you deposited an initial $1,000 into your Wealthfront cash account with no additional deposits, you’d have $1,161 after three years. That's an extra $161 just for putting your cash into the right account.
Already have a healthy savings stash? Here’s another example: If you have existing savings of $10,000, that means you would have $11,641 over the same time period, just for parking that money in the account.
While this rate may fluctuate based on market conditions, you won’t have to worry about costly fees eating away at your savings. Wealthfront offers zero fees and no minimum deposit, as well as unlimited transfers and free same-day withdrawals.
Once you’re comfortable with your emergency pot of savings, you can start looking at other ways to earn interest on your remaining funds.
Plan now for peace of mind
The vast array of saving and investing options out there can seem overwhelming.
Whether you need help figuring out your investing strategy or simply want to mitigate the effects of inflation on your finances, consulting a professional can help you make sure you have a plan that equips you to protect the wealth you’re in the process of building.
Advisor.com can help you find the advice you’re looking for by connecting you with the right financial experts who understand your unique situation, and your financial goals for the future.
Their online platform is a streamlined way to find the best advisor for you and your needs. Once you select one of your advisor matches, you can schedule a free, no-obligation consultation to discuss your goals and develop strategies to secure your portfolio.
Not inheriting property? You can still invest in real estate
Young adults are almost twice as likely to live with their parents than 30 years ago, but that doesn’t necessarily mean they’ll inherit the property they call home. Plus, given 60% of US homeowners still have a mortgage, a property inheritance doesn’t always come without strings (and interest payments) attached.
And for most of American history, housing prices have increased at a slightly-higher rate than US inflation. Though, in periods such as the ‘Great Moderation’ (from 1990-2006), housing returns were even greater than stock market returns.
While that means real estate can be a good investment, it’s can be an expensive and often inaccessible one too.
The good news is there are plenty of ways to access real estate without forking out the money to buy a property outright.
For example, Arrived is another terrific example of how you can access the real estate market without having to purchase expensive property or assume the responsibilities of a landlord.
The easy-to-use platform has all sorts of SEC-qualified investments including rental homes and vacation rentals that are accessible regardless of your income.
It’s even backed by world class investors, from Jeff Bezos, CEO of Amazon, to Salesforce CEO, Marc Benioff — talk about a stamp of approval.
Start by browsing their curated selection of homes, which include insights into their appreciation prospects and income potential. Once you find the property you’re after, you simply choose the number of shares you want to buy, and invest.
If you are looking to make a larger investment, you aren’t limited to residential real estate investments.
A report by First National Realty Partners (FNRP) showed that during periods of market stress and downturn, high-quality commercial properties tend to be available at a discounted cost. That renders them an attractive investment for those looking to take advantage of below-market costs.
With FNRP, accredited investors can access institutional and commercial real estate investments – and the entire investment process can be done on their slick platform. You don’t need to do the hefty analysis required to pinpoint the best investment opportunities, FNRP’s team of experts does all the legwork for you.
FNRP offers shares of properties leased by big names like Whole Foods and Walmart — and you can enjoy the potential returns without having to worry about tenant or property management issues.
Secure your retirement
If your retirement nest egg isn’t at the size you want it to be and you don’t have a large inheritance coming to you, gold can be your ‘safe haven’ to mitigate the impact of inflation.
Typically, it’s also more stable than stocks during economic downturns and recessions. In fact, gold has increased in value sevenfold over the last 100 years.
Another reason to invest in precious metals like gold is that they can provide significant tax advantages. This is especially important for retirement planning. For instance, opening a gold IRA with the help of American Hartford Gold, you can invest directly in physical precious metals rather than stocks and bonds.
By signing up with American Hartford Gold, you can also receive up to $15,000 in free silver, along with a complimentary investors guide to help you decide if this opportunity is the right fit for your retirement strategy.
