Growing up, you probably had that one wealthy person you greatly admired — that favorite aunt or uncle who had a chic car and stylish clothes, and who definitely gave the best presents. Or the cool neighbor whose house was just a little nicer than yours, whose yard was the envy of everyone else.
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As you got older, you started to meet other friends and colleagues who made a lot of money and learned how to use it wisely — because they understood how to protect it.
Knowing how to build a high-income career is important. But financially savvy people also know that it’s equally important to understand how to safeguard their money. They hire financial advisors to give them the best strategies and insights for building on their earnings and creating a more secure financial future.
Fortunately, these tips are relatively easy to follow, even if you’re still working your way up the income ladder.
Matthew Chancey, CFP, founder of Alpha Tax Title, knows a thing or two about working with high-net-worth individuals. When he thinks about what he’s seen, he goes back to the classic investment saying: concentration — as in picking the right stock or the right investment at the right time — can make you rich, but diversification can keep you rich.
“High-net-worth clients are already above average, and most are more interested in keeping the lifestyle they have instead of becoming much wealthier quickly, so they favor diversifying their assets,” he said.
Diversification means spreading your investments across different asset classes, like stocks, bonds, real estate and cash, so that no single downturn can wipe you out. It’s a simple concept with powerful protective benefits.
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When Evan Luongo, CFP, founder and lead advisor at NoDa Wealth Management, works with his high net worth clients — many of whom are balancing their careers with parenthood — one of the most important pieces of advice he offers is to create a more resilient financial structure. This can help them stay secure and grounded, even when faced with swings in the market or disruptions to their income.
A key part of this structure is having the right life insurance in place. That includes life insurance, disability insurance, and, in some cases, umbrella liability coverage. Determining the right mix for your situation can be tricky, so it’s essential to get personalized advice from a finance professional or insurance broker.
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