Wealth building is more important than ever to solidify your retirement and the position of your family in the future. It is always good to have qualified professionals to give you advice, but there may be some things that they cannot (or will not) tell you.
Here are five fast wealth building tips that you would have probably had to find out on your own.
1. You Can Become a Market Maker
If your wealth adviser is placing part of your portfolio in stocks and bonds, you are doing well. However, you may want to ask your portfolio manager if he or she is utilizing strategies beyond speculative directional trading.
Selling calls is a very conservative strategy that may add anywhere from 1 to 3% to your annual earnings. In selling options, you are effectively “making your own market” and becoming a smaller version of Goldman Sachs or Citigroup.
There are risks, of course, but if you stick to the more conservative strategies, you have a good chance of creating an income stream from your investments as well as enjoying their rise in value.
2. Cryptocurrency
Mainstream financiers are all quietly getting into cryptocurrency like Bitcoin. The most relevant governments in the world (the US, Russia, Japan, et al.) have stopped trying to destroy Bitcoin and its competitors. They are now working with the new structure, attempting to co-opt it and tax it.
As Wealth Authority recently reported, Bitcoin recently surpassed the $5,000 mark, suggesting the crypto is reaching permanent viability. This means that crypto may be a viable investment for retirement, especially since it has plenty of room to grow.
3. Tax Efficiency
Most financial advisers are in place to make you money, not worry about the tax implications of making you money. However, you may actually be able to make more from tax savings than pure profit in some situations. Work with tax professionals to spread out your tax load.
If you are making large out of pocket payments at any point in time, then you are not building wealth. If the only advice that your current advisers have for you is to place your money in tax deferred accounts (which you should do), you may need to add someone else to your team with more expertise.
4. Make Your House an Asset
Contrary to popular belief, your house only becomes an asset once you have paid or nearly paid it off. If you are looking to build wealth, you will likely find it through the real estate market. If you have income streams or extra money lying around that is doing nothing for you, direct it to paying down your mortgage. Even if the real estate market does not increase value in your home immediately, you now have a strong asset to serve you in case of an unexpected emergency.
If you are about to buy another large asset, you may be able to work out a lower interest rate if you let the house pay for it instead of shelling out your hard earned credit. Because your home is such a large asset, lenders assume it to be a safer bet than nearly any other asset that you can use as collateral.
5. Fire Your Financial Adviser
You will obviously never hear these words from your financial adviser, but it may be something that you need to consider. Firing your current adviser does not mean that you are fighting your financial wars alone. On the contrary, you are clearing the path to hire a financial professional who is sure to put your best interests at heart.
The type of financial professional you may want to look into is called a “fiduciary.” A fiduciary is basically a financial professional with a legal responsibility to put your interests ahead of his or her own.
Fiduciaries are paid a flat fee, reducing conflicts of interest that usually occur through other payment methods. With a fiduciary, you can be completely sure that commissions never play a part in the advice that you receive.
Assess your risk profile before taking any financial tips. Make sure that you are using money that you can afford to lose. Finally, if you are ever at odds about a financial decision, do not be afraid to ask trusted professionals. However, remember that your wealth is YOUR priority. No one is going to care more about your money than you, so never stop learning about finance.
Regards,
Ethan Warrick
Editor
Wealth Authority