9 Biggest Mistakes High Income/High Net Worth Millennials Make
9 Biggest Mistakes High Income/High Net Worth Millennials Make
Thomas Kopelman / August 2, 2023
We often associate wealth with financial expertise, but this could not be further from the truth. High net worth people are not immune to making mistakes. In fact, they make just as many mistakes, if not more than everyone else. And the worst part about it is that these mistakes they make can be even more costly due to higher dollar amounts behind the mistakes.
Let me help you avoid this by walking you through 9 of the most common mistakes I see high net worth millennials make.
Note: Learn from these. You can easily avoid them!
1. Thinking Their Income Will Always Be There
This might apply towards people with high incomes more than people with high net worths. But regardless, this group of people are taking on a huge risk assuming that their income will always be there. There are 3 main ways income can be lost:
Loss of job – Plenty of high income folks get cut when businesses are not doing well. This is why diversifying, building up assets, having an emergency fund, etc. is crucial.
A disability putting you out of work – 1/4 millennials will have a disability that stops them from working. The stats are scary. Having disability insurance in place to protect your income can be crucial!
Business Failing – Many high net worth accumulators are business owners. This means most of their wealth is in the business and their income is tied to it. That concentration brings on a lot of risk. Managing this business well and diversifying as you earn is crucial to keep you on a good path. Do not just use your business as a piggy bank.
2. Making Their Finances Too Complex
This is something I see way too often, people start making good money and their wealth builds. And because of this, they think they need to start investing in anything and everything.
Anytime a friend or someone they know comes with a business idea, they get involved. And then all of the sudden their balance sheet is all over the place. They have little organization or coordination, and oftentimes even lack liquidity.
Be careful doing this! You do not need to invest in anything and everything. Oftentimes the best strategy is to keep things simple. You do not want to get burned.
3. Taking On Too Much Unneeded Risk
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