There are a number of wealth killers that are lingering around. In this article I would like to identify the top three things that I have seen that can sabotage your wealth.
Ready? Ok great, here we go:
Suspect #1 – Taxes
This is probably the most obvious suspect. Taxes will absolutely drain your wallet if you aren’t careful. I suggest bringing a tax professional on your team who can help you efficiently tax plan to pay the minimal amount of tax that you should.
Communicating effectively with your tax professional can save you far more money than you paying them to help you.
Suspect # 2 – Knowledge
Knowledge? Yes, knowledge. You have to learn how to play the money game efficiently. You must set a budget and stick to it. You must know when and where to invest. You must know how much to put away for the classic “rainy day.” You must build up a portfolio of income-producing assets. You must consider your retirement, no matter how far retirement is from today. You have to deal with all of these aspects of money. If you don’t manage these aspects well, it could mean financial ruin for you and your family.
Read, read, read! Read books and articles about these aspects of the money game. Talk to others who are successfully navigating these areas and learn what could work for you. Enlist the help of a team of professionals who can assist you with each of these aspects.
Suspect # 3 – Communication
This one is not so obvious, but it is probably the most crucial. If you are married, or your financial situation is associated with someone else, it is important that everyone is on the same page. There have been times during my financial career when I have spoken to couples and families about financial situations and have often found there is little-to-no communication about finances. If you and your spouse or family member are on the same team, then clear communication about the financial plan for the family should be discussed often. How else will you know if you and your spouse or family member are working against one another unknowingly if financial matters aren’t discussed?
These tough conversation should be held with every member of your “team.” This is very important.
Suspect #4 – Planning
We communicate to ensure we are all on the same page, but we plan to set the course of action. If there isn’t a solid plan in place for financial future of the family, it is nearly impossible to effectively communicate. So what is the plan for retirement? Will you and your family be able to live in the same state you are in now once you retire? What happens if the family’s income is significantly impacted? All of those questions must be addressed in your plan.
These are the four things that can sabotage your wealth. Make sure to guard yourself and your family from each of them.