The Best Financial Strategies by Net Worth: $0, $100k, $500k+ #Finance

these are the top Wealth Building strategies by Net Worth today we’ll cover four Net Worth groups negative to 0 0 to 100K 100K to 500k and 500k to 1 million so let’s start with negative to0 Net Worth so

it’s important to remember that a negative to a$0 Net Worth doesn’t literally mean you have $0 in your bank account or that you’re living on the street your Net Worth is the value of all the things you own your Assets minus the

value of all your Debts your Liabilities so if you own a beautiful home worth $500,000 and a $40,000 Pokémon card collection but you’re $1 million in Debt then you’d still be in this category along with 10.4% of Americans if you fall

in this bucket there is one Financial strategy you need to focus on you need to get rid of the number one wealth killer from your life everyone talks about how the power of compound interest is the best way to build wealth but that’s only when it works in your favor the problem is compound

interest can work against you as well like the interest you owe on your Debt can compound as well making your Debt grow quicker and more substantially over time for instance if you have a Credit card balance of $10,000 with an APR of 26% and

you’re making the minimum payments of $250 a month it’ll take you about 7 and2 years to pay off your Debt and when it’s all said and done you’ll have paid $13,500 in interest alone I recommend two strategies to stop this bleeding both strategies work but

they work for different types of people the first strategy is called the Avalanche method Harvard Economist David la found that this method minimizes the interest you have to pay and gets you out of Debt faster the Avalanche method is where you prioritize your Debt

by Interest Rates for instance you want to identify all the Debts you owe from highest interest rate at the top to the lowest ones at the bottom then you list out the minimum monthly payments required for each card now just take a step back and check out your

budget first off you should have a minimum of $525 in this case tucked away every single month to make the minimum monthly payments across the four cards then you need to decide how much extra beyond that $525 that you can allocate every month to paying off your Credit card

Debt let’s say you have an extra $400 every month right so you’ll basically make the monthly minimum payments on each card and then you’ll pay another $400 on top of card a so you’ll be spending $565 a month to pay off card a until it’s completely paid

off once that’s settled you’ll move on to card C this time you’ll pay the minimum monthly payment of $210 plus the $400 that you set aside for Credit card Debt plus cards A’s former monthly minimum payment of $165 which comes out to around

$775 a month on card seal Loan until it’s paid off and then you would just repeat this step with cards B and then C until you are Credit card Debt-free but if you’re someone who needs quick wins to say motivated then the snowball method

might be a better fit for you with the snowball method you pretty much ignore the Interest Rates and you just start paying off your Debt from the smallest to largest for instance if we use the same list from earlier with the snowball method the order of priority

shifts you pay off your lowest bounds first and then you move on to your second lowest bounds and so on so a question I get asked a lot is which one should you pick now I don’t usually believe in absolutes it’s not like House of the Dragons where you have to pick team black or Team

Green so if you’re on the fence then I’d recommend a hybrid approach start off with the snowball method to start building momentum slowly over time and once you’ve paid off a few small Debts and your confidence is higher then switch to the Avalanche method the

hybrid approach lets you enjoy these psychological benefits while also saving time and money over time moving on the next bucket is 0 to 100K Net Worth and sure you might have some breathing room here but all it takes is one bad financial decision to fall into the negative

territory which is why these three Financial strategies are so important first you should create additional Income streams and you might be really tired of hearing about side hustles and working multiple jobs but if we’ve learned anything from the last few years it’s

that having one Income stream is risky like during 2020 millions of people lost their jobs and even now people are still getting laid off every day just relying on one source of Income puts your whole financial livelihood in the hands of your employer if anything

happens to your job then that could be the trigger that puts your Net Worth at risk so I’d recommend a side hustle whether that’s walking dogs teaching other people something being an Uber driver starting an online business or babysitting there were 261 working days in

the year and if you could just make 20 extra dollars for each of those days then you would have an extra $5,000 in your pocket by the end of the year next prioritize spending on Assets before Liabilities in the book Rich that portat there’s a slight different

definition for Assets and Liabilities the author says that an asset is something that makes you more money while liability is something that cost you money for instance owning a rental property is an asset because it can bring in rental Income

while a car is a liability because it loses value over time and requires maintenance and monthly expenses one of the easiest ways to build Assets is to invest in stocks and Bonds and while a good chunk of my money is in index funds I occasionally like to peek at

what the pros like top hedge fund managers and institutional investors are buying and selling usually it’s really hard to find this information but I check it out for free with my Brokerage called Mumu like they have this institutional tracker feature that shows all this data

for free which is an absolute Game Changer so if you’re interested if you sign up with my link below and you make it qualified deposit you’ll get up to 15 stocks for free plus there’s a limited time 88.1% apy on uninvested cash for the first 3 months so if you’re ready click

the link below or scan the QR code on the screen next in the book I will teach you to be rich the author explains how it’s not just about the money you make it’s about the money that you keep and what you do with that money that really makes a difference like you could be earning 100K

200k 300K a year but if you don’t know how to manage your money you’re just going to be living paycheck to paycheck one of my favorite ways to manage my money is to automate everything meaning once my paycheck hits my account a portion of it flows into my Savings

account into my investing account and then also into my spending account and then from there they’re automatically distributed further the next bucket is the 100K to 500k Net Worth range at this point you have a solid buffer right you’re not just trying to stay afloat

anymore so your financial strategy should evolve you still want to do the basics like increase your Savings in your Income but there are two specific strategies you should explore here number one you want to prioritize your tax strategy Taxes are

going to be one of the largest expenses of your life and while you have to pay them there are many ways in which you can reduce your tax bill legally and something that I see all the time is that many people think that the more money you make the more Taxes you’ll pay like 3

years ago my friend told me that he was going to turn down a pay raise because he said it was going to put him in a higher tax bracket and he’ll have to pay more Taxes but this is a common misconception the US follows a progressive tax system with marginal tax brackets

basically the more Income that you earn the higher the tax rate you pay but the higher tax rate doesn’t apply to your your entire Income I won’t get into the technicals in this CashNews.co but essentially there is no case where moving up in a tax

bracket leads to you actually making less money now the easiest way to reduce your Taxes is to use tax advantage accounts depending on your job some of these accounts might not be available to you but it doesn’t hurt to check with your employer so starting off you got the

401K in 2024 you can contribute up to and reduce your taxable Income by up to $23,000 or if you’re over 50 that number shoots up to $30,500 then you have your Roth ra where the contribution limit is $7,000 for 2024 with a catchup contribution of $1,000 if you’re over 50

then your hsas which in 2024 the limit is $4,150 for individual coverage and $8,300 for family coverage next is 529s where some states allow state tax deductions from contributions like New York which shout out they allow residents to deduct up to $5,000 per year or $10,000 if you’re married

from State taxable Income some other ways you can reduce your tax is with your house if you have one for instance you can deduct mortgage interest paid up on up to $750,000 worth of your Loan principal you can deduct state and local property Taxes

up to a combined limit of $10,000 per year and when you sell your primary home you might be able to exclude up to 250k of Capital gains or 500k if you’re married from your Income there are a ton more little known Tax Strategies so if you’re interested

I’ll make a CashNews.co on that in the future next aim to have at least $100,000 invested now this might sound strange because you’re already in this bracket but remember your Net Worth includes Assets like your house and Pokemon cards so if your house

is worth $500,000 that doesn’t mean that you have 100K invested in the Stock Market the reason this is so important is because your Net Worth will explode after you have 100K invested thanks to two things number one your money scales at different magnitudes

for instance let’s assume that you have three different accounts account a has $1,000 account B has $110,000 and account C has $100,000 if we assume all three accounts have a 10% return in the year then by the end of the year account a would become $1,100 so a Profit of $100

account B would have $111,000 and account C would have $110,000 the amount of time that you invested the money is exactly the same but the Profits are significantly different because as you increase the size of your Investments the return will increase

proportionally which ultimately means that your money you grow your wealth at a much faster pace and this is where the phrase money makes more money stems from so every single day that you’re not prioritizing your 100K cash invested you lose out on the opportunity for time and compound growth

and by the way if you need help starting investing you can get my free investing Chi-Chi to help you out again it’s free so if you’re interested get it with the link below moving on if you have a Net Worth of 500k to 1 million you are in the top 21% of the population

continue doing the basics like increasing your Savings Income but now there are two specific strategies you should implement first you need to understand leverage and how to take advantage of it up to this point many people understand Debt to be a

burden and for good reason it’s something you can’t really take advantage of unless you have a decent chunk of change but for people with money the same concept of Debt is referred to as leverage and it’s a completely way to think about borrowing money for

instance even famous multi-millionaires like these guys take out million dooll Loans to buy their properties but why are people with money borrowing money and taking on more Debt the reason is because of Leverage and how they’re using the money to make more

money when most people take on Debt it’s mostly with Credit cards to go on vacation to get a new couch for pineapple pizza to get a new TV but those who know how to use leverage use Debt to buy Assets that increase in value

and appreciate like property and businesses in simple terms these rich people borrow money to buy these properties not because they need the money to buy them but because they can use their actual cash to invest in other Assets that may Yield greater returns so

when you’re at this Net Worth level you can start to use Debt and leverage for you instead of against you next at this point you need to stop believing that working more hours equals more money you might have multiple jobs or side hustles but until you

understand this it’ll be tough for you to scale your wealth and Achieve Financial Freedom and when I really understood this concept it completely change the ways that I did things especially with how I make my money now you see there’s a common misconception that the more hours you put

into something the more output you get and the more money you make and I can’t blame you right because that makes sense it’s what we were all taught growing up you essentially trade your time for money if you work for 8 hours then you get paid for those 8 hours nothing more nothing less

unless you’re getting scammed but there are other ways to make money where how much you earn doesn’t depend on how many hours you work and the reason you need to understand this and actually do it is because if you really want to accelerate your wealth there’s only so much time

you can can trade like one of my friends from high school he became a carpenter right he made custom furniture for clients he could maybe make 50 Furniture pieces in a month and in 2021 his schedule was completely booked right he couldn’t pick up more clients cuz it was impossible he just

didn’t have the time so he did the next logical thing he raised his prices but even then at some point he realized that he could only charge so much for furniture so then one day he decided to hire more Carpenters so he can pick up more clients and soon he realized that he didn’t have

to do any woodworking himself because he had a whole operation a whole team helping him and therefore he was able to break the time money tradeoff and now he works less and makes more money than ever before so at this category you need to look for different ways to increase your

Income outside of a 9 to-5 corporate job where it doesn’t rely on trading your time to make money so you can truly build wealth in a way that gives you freedom and Independence and that leads me to something you’ve got to start accepting even if you’re trying your

hardest to build wealth there’s one extra step that you might be forgetting and it’s that it’s all about these small consistent habits that you do click here to discover the 12 tiny habits that made me Rich