6 Strategies Wealthy Couples Use To Grow Their Net Worths
It may feel like some people have the cards stacked in their favor when it comes to finances. Maybe they chose a job with a high salary, had a business idea that took off or inherited money.
However, high-earning Americans don’t have a secret formula that helps them accumulate wealth faster than other people. They take simple, basic steps that the middle class can replicate in small ways to grow their own nest eggs.
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“Most of their success comes from doing a few simple things consistently and at a larger scale,” said Rob De Lessio, director of lead advisor at Strategic Wealth Designers.
We asked De Lessio and two additional finance experts for their best wealth-building tips that can help you get richer, too.
1. They Pay Themselves First
You’ve probably heard the finance adage “pay yourself first” many times. Wealthy couples actually put it to work by automating their savings and investments.
“Instead of saving what’s leftover at the end of the month, they invest first and spend what’s left,” De Lessio said.
You can do this with automatic transfers into a 401(k), IRA or brokerage account every payday.
“Even $100 per month invested consistently can compound significantly over time,” De Lessio said.
2. They Own a Home
While it may be difficult for couples just starting out to afford a home, experts suggested doing whatever it takes to save for the purchase.
“Homeownership is the single greatest creator of wealth in America,” said Christopher Duffy, CEO and founder of HummingBird Development. “There’s no other way or place you can invest with limited money down on an appreciating asset.”
Plus, you get to live in the asset, avoid paying rent to someone else and receive tax benefits.
“The leverage you get from buying a house … is unmatched in any other investment vehicle,” Duffy said.
3. They Avoid Lifestyle Creep as Their Income Rises
All three finance experts said that one key to accumulating wealth is putting money into assets before luxuries. A twist on the “pay yourself first” concept, wealthy couples put extra money like raises, bonuses and windfalls into investments or assets rather than items that depreciate.
This doesn’t mean you can’t enjoy yourself, but create a budget for things like travel, dining out or new furniture.
“One of the highest impact habits my wife and I have adopted as a couple is cutting spending on depreciating assets like new luxury cars, the latest gadgets and big-ticket toys,” said Nick Anderson, CMO at AltCoin Pro and owner of Bullrunners. “Redirecting that money into investments […] has made a massive difference over time.”
4. They Have Multiple Income Streams
High-earners know nothing is certain, so they create multiple income streams, both active and passive.
Even without a lot of disposable income, you can create multiple income streams through side gigs, micro-businesses, crowd-funding platforms or house-hacking, where you buy a two-family home and rent one half out.
“One of the common themes among wealthy households is that they don’t rely on a single source of income,” De Lessio said.
5. They’re Open to Other Types of Investments
Building upon the concept of multiple income streams, De Lessio said, “Many affluent couples eventually branch out beyond their 401(k)s and IRAs.”
He noted that private equity is becoming popular, but it requires accredited investor status. Rental real estate, multiple businesses and alternative investments are other vehicles high-earners use to build wealth.
“My wife and I are a high-earning married couple in our early 30s, focused on long-term wealth preservation and growth,” Anderson said. “We view crypto as one of the stronger long-term growth opportunities available.”
If you have $5 to $10 to spare, you can easily invest in crypto, although $50 to $100 is a better starting point.
6. They Use Dollar-Cost Averaging
If your investment account includes stocks, ETFs, index funds or even crypto, practice dollar-cost averaging, where you invest a consistent amount every month regardless of the asset price. You’ll end up buying more when the price is low and less when the price is high, ultimately leading to a lower average cost per share.
“Dollar-cost averaging into a quality index fund every month may not be exciting, but it’s created a tremendous amount of wealth over the last several decades,” De Lessio said.
“Consistent investing compounds and time in the market still does most of the heavy lifting,” Anderson agreed.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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