7 Money Habits My Richest Clients Live By

I’m a Financial Advisor: 7 Money Habits My Richest Clients Live By

Martin Dasko  Wed, August 21, 2024   GOBankingRates

While it’s easy to assume that many rich people came from money, the National Study of Millionaires, conducted by Ramsey Solutions, discovered that 79% of millionaires in America didn’t receive any inheritance from their families. This means that most rich people have to rely on financial habits that will help them build wealth and keep it, instead of receiving it for free.

GOBankingRates contacted two financial advisors to find out what money habits their wealthiest clients live by. Also, find out how a financial can help you, even if you’re not wealthy.

Rich People Think About More Than Just Saving Money

“The wealthy that remain wealthy don’t just save — they save wisely, invest with discipline and keep their costs low,” said Andrew Latham, a CFP and managing editor at SuperMoney. “They play the long game, focus on minimizing taxes and know the value of diversification.”

Rich clients are known for being diligent about their investments. Since there are only so many hours in a day, you have to ensure that your money is working for you when you’re unable to do so.

Latham added, “It’s not just about earning more, but about holding onto it and letting it grow steadily over time.”

They Live Below Their Means

“Many wealthy people live frugally — driving older cars and living in reasonably priced homes,” said Latham. “Nearly 90% of millionaires are self-made, often living in homes under $500,000.”

Many financial experts recommend that you try to save 20% of your pay so that you can plan for the future. Ramsey Personality Jade Warshaw is a proponent of setting aside 15% of your take-home pay for retirement so that you can have your money work for you. Either way, the richest clients are usually those who have embraced some sort of frugality, so they don’t live above their means, ensuring that they can focus on building wealth.

They Track Their Finances

“The richest clients really pay attention to their expenses and track their cash flow closely,” said Taylor Kovar, CFP and CEO of 11 Financial. “This habit helps them make smart financial decisions and spot areas that might need to be improved.”

https://www.yahoo.com/finance/news/m-financial-advisor-7-money-160040498.html

4 Things You Should Never Put in a Living Trust

4 Things You Should Never Put in a Living Trust

Paige Cerulli   Sun, Aug 18, 2024   GOBankingRates

I’m an Estate Planner: 4 Things You Should Never Put in a Living Trust

A living trust can be a helpful estate planning tool, and it can help manage assets including your personal home, bank accounts, and investment accounts. But there are certain assets that you should never put in a living trust, or you could face tax implications, difficulty accessing funds you need, and other complications.

If you’re exploring creating a living trust, then it’s important to understand how it works and which assets it’s not the right option for.

How a Living Trust Works

Probate, which is the process of transferring your assets after you’ve died, can be time-consuming and expensive. Kelsey Simasko — attorney at Simasko Law in Mount Clements, Michigan — explained that you can use a living trust to help avoid your assets going through probate court. Living trusts may also help prevent family fighting.

“A living trust is essentially just a bucket that says, ‘I (the principal) am creating a bucket and I am in charge of everything in this bucket, and when I die, child A (the trustee) will be in charge of the bucket, and it’s their job to give $10,000 to the church and then split everything equally between my other three children (the beneficiaries),'” said Simasko.

In the above example, when the principal dies, child A will be responsible for selling the house and wrapping up the principal’s affairs, rather than those assets going through the probate process. Simasko explained that a trust offers the benefit of putting protections in place for the other beneficiaries if the trustee sells the house for less than the fair market value, or misuse the money. At the same time, the trustee doesn’t face the challenge of having to get everyone’s approval to do everything.

Cynthia Brittain — partner at Karlin & Peebles, LLP in Los Angeles — explained that a living trust also has important tax and protection benefits. “A trust document can be drafted to incorporate U.S. income and estate tax provisions that are highly beneficial,” she said. “The trust can be drafted such that the trust will shield assets from U.S. estate tax going forward.”

She noted that a trust also provides asset protection at some level on an ongoing basis, and gives the family more privacy than the probate process would.

Things To Never Put in a Living Trust

TO READ MORE:  https://finance.yahoo.com/news/m-estate-planner-4-things-150129110.html

Is There Any Point In Me Writing A Will?

Is There Any Point In Me Writing A Will?

 Maurie Backman     Moneywise

Sun, August 18, 2024 I’m 75, in poor health and I scrape by on Social Security alone. Is there any point in me writing a will?

I’m 75, in poor health and I scrape by on Social Security alone. Is there any point in me writing a will?

The average 75-year-old American has about $462,000 in retirement savings, according to the Federal Reserve, but not everyone has the cache needed to ease through their golden years.

Many people reach their senior years with few to no assets. They don’t have savings, they don’t own homes and they’re largely reliant on the money they get from Social Security to cover their living expenses.

If you’re older with no savings or assets of significant value, then you may wonder if it’s worth writing a will. After all, why spend the time and go through the hassle if there’s nothing to pass down?

You should know, though, that you don’t need a sizable estate for a will to make sense, because it’s not always about the money.

You Still Want Control Over Your Assets

You may sell yourself short, but remember, the things you own may have sentimental value and potentially hidden value. If you want to ensure your belongings go to specific people — whether it’s a grown child, a grandchild or a beloved nephew — then you need a will to spell that out.

Without a will, there’s no telling what might happen to your assets upon your passing. That means the $23 painting your daughter has always loved might not end up with her if you don’t make your wishes clear.

Furthermore, you never know which of your assets might be more valuable than expected. That old piece of jewelry you kept as a gift from a former flame? You might assume it’s worth next to nothing, but an appraisal might reveal that it’s a $1,500 piece. And that $23 dollar painting your daughter loves might be a priceless work of art, like that Dürer drawing bought for $30 at a yard sale.

Even the old clunker in your driveway may be worth something — if not to a new driver, then to a dealer that can sell it for parts. So it’s best to create a will so that there’s no confusion over who gets to inherit your possessions and to also potentially help your loved ones avoid conflict.

An Estate-Planning Step You Can Handle On Your Own

TO READ MORE:

https://www.yahoo.com/finance/news/m-75-poor-health-scrape-115100087.html

I Just Received A $10M Inheritance What Should I Do?

I Just Received A $10M Inheritance  What Should I Do?

Christy Bieber  Sun, August 18, 2024  Moneywise

I'm 31, single and just received a $10M inheritance from a parent I didn't know I had — what should I do?

A caller to "The Ramsey Show" experienced a shocking twist when his mom showed up on his doorstep to tell him the two of them had just inherited a fortune — but the news also delivered a major curveball.

"A family friend who she’s known for a long time passed away," the caller told co-hosts George Kamel and John Delony. "This individual left my mother and myself in his will, and according to the lawyer who's handling the estate, it’s worth between $10 million and $14 million."

That sounds like a good thing, but there was more to come. As the caller explained: "In the will, he’s designated me as his son. I’ve never met this man, never met him before in my life."

Talk about a life-changing moment. Not only does the caller have some emotional issues to deal with, he also has to figure out what to do with his share of sudden wealth.

Understanding The Details

Receiving a multimillion-dollar inheritance can be overwhelming to anyone, especially when it's unexpected. The first key thing to do is to understand the details of what this means for your finances.

In this particular situation, the caller explained he wouldn't just be handed the money.

"We won’t necessarily be able to collect the liquid cash," he said. Instead, the money is being kept in a trust and will be doled out over time. "Me and my mom are splitting the dividends, the interest, and whatever income that trust brings in.”

The caller says the trustee, who was the deceased man's lawyer, estimates the average income would be $500,000 a year.

Obviously, this is a complicated way of receiving an inheritance, so the first thing The Ramsey Show co-hosts recommended was talking to a lawyer.

https://www.yahoo.com/finance/news/im-31-single-just-received-113500654.html

4 Things You Don’t Know About Your Money

I’m a Financial Expert: 4 Things You Don’t Know About Your Money

Laura Beck   Fri, August 16, 2024   GOBankingRates

You might think you’ve got a handle on your finances, but there’s probably a thing or two you don’t understand.

GOBankingRates spoke with financial experts to uncover some surprising truths about money that many people overlook. Carlos Rodriguez, director of financial planning at Edelman Financial Engines, pointed to EFE’s 2023 Everyday Wealth in America report, which indicated that 46% of Americans cite personal finances as their top source of stress. That emphasizes the importance of effective financial management for overall well-being.

From investment strategies to the power of small savings, these insights could change the way you think about your hard-earned cash. Here are four things you (probably) don’t know about your money.

Earning passive income doesn't need to be difficult. You can start this week.

Being Too Conservative Can Cost You Big Time

If you’re the type to keep your money tucked safely away in a savings account, you might want to reconsider.

Robert R. Johnson, Ph.D., CFA, professor of finance at Creighton University’s Heider College of Business, has some eye-opening data to share.

“Being conservative with investments over time is extremely costly,” he said. “From 1926 through 2023, government bonds earned an average return of 5.1%. One dollar invested in government bonds at the beginning of 1926 would have grown to $133 by the end of 2023.”

Sounds pretty good, right? Well, hold onto your hats. Johnson continued, “Over that same time period, large stocks (think S&P 500) earned 10.1% compounded annually. That same dollar invested in an index of large cap stocks would have grown to $14,568 by the end of 2023.”

That’s not a typo, folks. We’re talking about a difference of over $14,000 from a single dollar. As Johnson put it, “A 5% annual difference in returns results in an astronomical difference in terminal wealth.”

You Can’t Save Your Way to Wealth – You Need To Invest

If you think squirreling away money in a savings account is your ticket to wealth, think again. Johnson busts this common myth wide open.

“One of the biggest money myths is that you can save your way to wealth,” he said. “The wealthy save and invest. The middle class, too often, simply save. Unfortunately, it isn’t enough that people simply save. That is a necessary condition for building wealth, but not a sufficient condition for wealth accumulation.”

To Read More:  https://www.yahoo.com/finance/news/m-financial-expert-4-things-170009313.html

Ramit Sethi’s Most ‘Brutally Honest’ Money Advice That Can Impact Your Wallet

Ramit Sethi’s Most ‘Brutally Honest’ Money Advice That Can Impact Your Wallet

Peter Burns  Wed, Aug 14, 2024,  GOBankingRates

When it comes to the topic of money management, suggestions can get complicated quickly. Sometimes, the best financial advice is blunt and straightforward, even if it is a bit uncomfortable to hear.

In a recent video, Ramit Sethi, personal finance expert and New York Times bestselling author of “I Will Teach You To Be Rich,” got frank and gave direct lessons that can help you improve your finances.

Earning passive income doesn't need to be difficult. You can start this week.

You’re Not Unique

It’s true that no two people are the same. However, when it comes to personal finance, people have a lot in common. By following basic guidelines, most people can improve their financial situation regardless of how much they make and how much debt they have.

It’s Not About Your Morning Routine

Social media has brought an onslaught of creators explaining exactly what you must do in the morning to make yourself rich. While getting the most out of your morning is important, what you do won’t amount to more savings. The most important thing is to be intentional with your time and figure out what works best for you.

Don’t Blame Inflation

Inflation has become a common scapegoat for individuals with poor financial habits. Rather than blaming inflation, take accountability for your actions. Start keeping a budget and tracking your spending to make a real difference. Then, invest the money you save from cutting your expenses to counter inflation.

Don’t Try To Time the Market

People new to investing will try to execute the age-old adage: buy low, sell high. The advice is correct if you’re trying to profit, but predicting when low and high occur can amount to substantial losses. Sethi said you should ride out market fluctuations by keeping your money in the market long term. Instead of waiting for the market to dip down so you can buy shares, you should invest a bit of your income each month.

Focus on the Right Things

People often focus on the wrong things when they try to get their finances in order. These include things like getting the right finance app, buying the cheaper drink at a restaurant and deciding which budgeting category to put expenses in. While these decisions can help, prioritizing the bigger picture is more important. Focus on being consistent and following the right financial rules to succeed.

You Probably Can’t Afford It

To Read More: https://finance.yahoo.com/news/ramit-sethi-most-brutally-honest-150021157.html

4 Shrewd Ways to Protect Your Wealth

4 Shrewd Ways to Protect Your Wealth

By Marina Benitez   August 1, 2024  GoBankingRates

Keep your money where it belongs — secure and working for you.

Wealth isn’t about how much money you make, but how much you keep. Whether you’re just starting out or have already built a comfortable nest egg, protecting your wealth can feel like a never-ending game of whack-a-mole. From market fluctuations to unexpected expenses, there’s always something trying to chip away at your hard-earned money.

But don’t worry; we’ve got some clever and easy-to-implement strategies to keep your money right where it belongs — secure and working for you.

1. Protect Your Portfolio With Precious Metals

If the past few years have shown us anything, it’s that disruptions to the market can come out of nowhere. Between the pandemic, supply-chain issues and bear markets, a lot of people’s retirement savings felt the impact. 

That’s why it can be a smart idea to look for ways to protect your retirement savings from the unpredictable. For a lot of people, investing in precious metals is a way to diversify and protect their investments.

One way to do this is with a precious metals IRA through a company like American Hartford Gold. Precious metals often outperform other investments in a volatile market, and their value tends to rise with inflation, making them an effective hedge during uncertain economic times.

Opening a gold or silver IRA is easy, and you can roll over funds from existing retirement accounts. Or you can buy gold and silver directly from American Hartford Gold’s collection.

Worried you may need to sell your precious metals in the future? American Hartford Gold offers buyback commitment and will purchase your assets back from you at the highest price. Plus, American Hartford Gold has an A+ rating with the Better Business Bureau.

Want to diversify and safeguard your investments by adding gold and silver to your portfolio? It’s easy to get started here and get your free guide. 

2. Get Matched With A Financial Advisor for Free

If you’re not already wealthy, getting a financial advisor probably sounds expensive and out of reach. That’s why we like a company called Unbiased. They’ll match you with a financial advisor in your area — for free.

https://www.gobankingrates.com/shrewd-ways-to-protect-your-wealth-2410428/?costid=863&utm_source=yahoo.com&utm_campaign=1281154&utm_term=media_link&pub_inventory=v1&utm_content=5&utm_medium=rss

6 Mistakes People Make at the Bank During a Recession

I’m a Banking Expert: 6 Mistakes People Make at the Bank During a Recession

J. Arky  Tue, August 13, 2024   GOBankingRates

Economic ups and downs still have lots of people worried about a potential recession. During times of downturn, many people become hyper-focused on the markets, jobs and their own personal finances tied up in banks.

While there might be some desire to move money around or take it out of financial institutions altogether, that could actually end up doing more harm than good on both a macro and micro level.

GOBankingRates reached out to banking experts to understand the six mistakes that people make at the bank during a recession. Here is what we found out below, and you can also check out why a recession is worse for your wallet than inflation.

Failing To Review Your Financial Goals

Just because there is a recession does not mean you don’t have financial goals, nor any way of working on achieving them. Do not lose sight of your future when it comes to your money.

“One of the most common yet frequently overlooked mistakes during a recession is not re-evaluating your financial goals,” said Adam Garcia, founder of The Stock Dork. “Most people will carry on saving, spending as well as investing just like they were used to before the economy went down.”

He continued, “However, it is better to be cautious in times like these. Review your financial plan by focusing on liquidity and debt reduction rather than aggressive growth or luxury purchases if possible. This should ensure you are grounded and do not go through tough times when sources of income become unpredictable.”

Not Having a Safety Net for Your Account

Running your account into the red can be dangerous, particularly during a recession.

“Overdrafting an account might seem like a small error, but during a recession it can have severe consequences,” Garcia explained. “If you overdraw often enough, those fees add up quickly and may hurt your credit score thus making it hard for you to get loans or credit cards when they would be most useful to you.

“To avoid this scenario, consider putting aside a small emergency cushion in checking or linking it to a savings account for automatic transfer purposes. In case of overdrawing, call your bank immediately so that you could tell them what landed you in such a position. Many banks offer courtesy fee waivers if it’s a rare occurrence or due to an exceptional circumstance,” suggested Garcia.

Failing To Recognize Interest Rate Changes

During times of economic turmoil, interest rates can change. If you have a loan or credit card connected to your bank, not taking note of these fluctuations can put you in dire financial straits.

“Central banks usually adjust interest rates during recessions leading to fluctuations that affect savings and loan repayments directly. Therefore, one of the mistakes that people make is not paying attention to these changes,” Garcia said.

“If interest rates drop, it might be an excellent opportunity to refinance high-interest loans or mortgages,” he added. “Conversely, if you notice interest rates rising, you should consider locking in lower rates for savings accounts or certificates of deposit (CDs). Taking the initiative regarding interest rates can save you a lot in the long run.”

Stopping Automatic Payments

Money tends to become tight during a recession, but nevertheless, there are bills to pay. If you have automatic payments turned off, consider turning them back on again.

To Read More:  https://www.yahoo.com/finance/news/m-banking-expert-6-mistakes-143116946.html

How Much Cash Should I Have On Hand?

How Much Cash Should I Have On Hand?  It Might Be Less Than You Think

Ivana Pino ·Senior Writer  Tue, August 13,  Yahoo Personal Finance

According to an analysis by Capital One, 47.8% of American adults make no cash purchases in a typical week. And in the U.S., an estimated 87.4% of all transactions are cashless.

With card and digital payments emerging as the primary payment methods for most consumers, you might wonder how much cash you should keep in your wallet — if any at all.

Here’s a look at the benefits and drawbacks of carrying cash, and how to go about deciding how much you should keep on hand.

How Much Cash Should I Have On Hand?

Cash may no longer be king, but it’s not obsolete by any means. There are instances when paying in cash might be more beneficial than using a debit card, credit card, or digital wallet. For instance, many small businesses prefer cash and may even offer a small discount because it saves them the fees associated with credit card transactions.

Experts say it’s common for most Americans to carry $20 or $30 in cash. Ultimately, however, the amount of cash you should have on hand depends on your unique financial situation.

When determining the right amount to carry in your wallet, consider how often you use cash and for what types of expenses. Do you prefer to save up cash for big-ticket purchases, or do you mainly rely on cash for smaller transactions such as tipping?

Either way, it’s best to minimize the amount of cash you keep on hand. For one, cash isn’t insured against loss unless it's deposited in a bank, making it vulnerable to damage, loss, or theft. Plus, physical cash doesn’t have the opportunity to earn interest or grow in value. And over time, inflation reduces the purchasing power of cash.

That said, you do want to ensure your spending money and emergency savings are “liquid.” For money that you expect to need in the near future, consider depositing it in a federally insured bank account, such as a checking account or high-yield savings account. This allows you to generate interest, which helps protect your purchasing power and increase your wealth over time, while also maintaining easy access to the funds.

Pros And Cons Of Carrying Cash

Having some cash in your wallet can be helpful when you find yourself in a situation where a merchant or retailer doesn’t accept cards or digital payments. But there are definitely downsides to carrying cash too.

Here are some of the major pros and cons of cash to consider when evaluating how much you should keep on hand.

To Read More:  https://www.yahoo.com/finance/personal-finance/how-much-cash-should-i-have-on-hand-164855098.html

5 Steps I Now Take To Protect My Money

5 Steps I Now Take To Protect My Money

I Recovered Financially From Identity Theft: 5 Steps I Now Take To Protect My Money

Cynthia Measom  Mon, Aug 12, 2024  GOBankingRates

When Marissa was a single woman in her 40s, she was going through some medical challenges that required several surgeries and treatments.

“Between procedures, consultations and follow-ups, I found myself writing checks more often, mainly to hospital billing departments, specialist offices and pharmacies,” she explained. “I had trusted that my financial transactions were secure and stayed focused on my recovery, wanting to get back to a normal life.”

Little did she know that she was about to experience a new challenge: a stolen identity.

How the Identity Theft Happened

Marissa said that she was glancing through her bank statements — something she had been putting off for a couple of months — and noticed a check that didn’t look familiar. It was written at a retail store in a state she had never even visited.

“I had so many medical payments going out, and my mind was often scattered with everything going on, but this stood out like a red flag, because I had only written checks connected to my medical expenses,” Marissa said. “I panicked and began combing through my statements, checking every line, every check and every payment. I found out checks in my name were being written all over the country — some at retail stores, others at restaurants, even a few at high-end boutiques.”

That’s when she realized her worst fears: her identity had been stolen.

“I immediately contacted my bank, and they confirmed it,” Marissa said. “Someone had somehow gained access to my checking account and was forging checks they had created in my name with my account number. I thought I had always been cautious and careful with my information, but it hadn’t been enough.”

After reporting the theft to the authorities and closing her compromised accounts, Marissa  began to piece together what might have happened. She concluded it had to be from the checks she had written in connection with her medical bills.

Later, the person responsible was arrested by authorities, and it was determined it was an employee of the hospital billing department where Marissa had received treatment.

How Marissa Protects Her Money Now

After her identity was stolen, here are the steps Marissa has taken to help protect her money.

To Read More:  https://finance.yahoo.com/news/recovered-financially-identity-theft-5-160005704.html

My Estranged Sister Wants To Borrow Money From Me

My Estranged Sister Wants To Borrow Money From Me — But I Don’t Feel Comfortable With That. What Should I Do?

Christy Bieber   Sun, August 11, 2024 Moneywise

Estrangement among family members is hardly uncommon — and money matters can often make the situation worse.

According to research cited by the American Psychology Association (APA), 27% of Americans over age 18 are currently estranged from a relative. Of that cohort, 10% reported an active estranged from a parent or sibling.

Coping with these consequences can be difficult under the best of circumstances. But what happens when your estranged relative — for example, a sister who is in dire financial straits — reaches out and asks you for help? An already tense situation can become even messier.

If you find yourself in a similar situation, there are a few things to consider before giving a response.

Put your financial security first

While offering financial help to an estranged relative may mend the rift, the more likely outcome could just spell more trouble.

In fact, a LendingTree study of more than 1,000 American adults found that nearly a third of respondents who lent or borrowed money from a family member reported negative consequences.

If you aren't close with your sibling, as an example, this rift in your relationship will likely only increase the odds that they won't live up to their end of the deal. You could find yourself losing money in the long run or encounter damaged credit if you co-sign for them.

In fact, more than a third of the lenders in the study have not been paid back, with 24% regretting their decision to loan money to their relative or friend.

Unless you're in a healthy financial position and have a genuine desire to provide a gift outright with no expectation of payback, avoid entangling your finances with an estranged relation.

Even if you do decide a gift is the right move, you may want to consider the reasons for their monetary request and whether you'll end up resentful about the interaction at a later date.

If they have a tendency to mismanage their money and are likely to be struggling financially again within a short amount of time, you’re likely going to be feeling worse about the situation than if the estranged relative had experienced an unexpected income loss, for example.

Because the stakes are high, proceed with caution when making your decision.

Offering to help in other ways

https://finance.yahoo.com/news/estranged-sister-wants-borrow-money-110900300.html