It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. — Robert T. Kiyosaki
Most conversations surrounding increasing wealth typically focus on earning higher rates of returns with investments. However, chasing higher rates of returns can subject you to increasing risk and potential loss of principal. I’m not sure about you, but I detest losing my hard earned money. Now, it’s very important to continue to invest a portion of your money to grow your wealth, but it’s equally important consider how your others dollars are being used.
At this time year, the topic of taxes is heard in just about every conversation. Even with the tax rate reform recently passed, the burden of tax is still the highest expense people face for those making decent incomes. Combined with interest costs on debts for homes, automobiles, and education along with normal living expenses, these costs likely consume at least 90% of most households’ gross income. With average savings rates in the mid-single digits, most are struggling to build the wealth they desire, so they are pushed to chase higher rates of returns on their investments.
What if you could reduce the costs associated with your tax and debt burden? How would that impact your ability to save and build wealth safely?
Take this example of a family making $100,000 a year. If they were dilligent enough to save 10% of their money to invest ($10,000) and were able to make a 10% return on that money, they would earn $1,000 in the year pre-tax.
What if the family applied some different strategies which resulted in a 5% reduction of their $90,000 in expenses by stopping or reducing losses they weren’t even aware. That would result in a $4,500 increase in income for the family just in that one year and this increase could continue for future years to come. That’s a significant difference and didn’t require taking on additional risks with their investments. It just required being open-minded to different strategies.
By having the additional wealth with less risk and more certainty, what would that mean for you and your family? What would it allow you to do that you can’t do today? Having additional wealth is good, but what is more important is the impact it can have for you and those that matter most.
It might a good time to take a closer look at your entire financial picture to see if you are taking losses that are unknown and are unnecessary so you can recoup it for your benefit.
