5 Ways Wealthy Boomers Are Better at Money Than You — and How To Steal Their Secrets
Saving for your future and guaranteeing yourself a cushy retirement is no easy task. But with persistence, proper financial planning and consistent contributions, you can build a nest egg without sacrificing a gratifying quality of life during your working years.
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Baby boomers, whose youngest members are approaching 60, set a good example you can follow to improve how you manage your money, according to AP Moneywise.
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5 Ways To Increase Your Wealth
1. Invest As Much As You Can
Americans ages 55 to 69 held about 42.4% of U.S. household wealth as of Q3 2023, and those ages 70 and older held 30.4%, according to the Federal Reserve’s most recent Household Debt and Credit report. This generation has saved and accumulated more wealth than any other generation, and the wealthy among them continue investing after retirement.
As a general rule of thumb, you should always invest 10-15% of your annual income towards long-term goals such as retirement. Investments can come in many forms, including fixed-income investments like certificates of deposit and bonds, as well as real estate and retirement accounts such as a Roth IRA.
2. Avoid Living Above Your Means
It’s tempting (and dangerous) to upgrade your lifestyle every time you get a raise, promotion or a bonus. But saving more money each time you see an increase in your income rather than spending it will lead you down a more secure financial path.
3. Always Set Automatic Savings
Be sure to designate part of your paychecks to automatically be deposited into your savings and retirement accounts on payday. Known as the “pay yourself first” strategy, prioritizing saving and investing takes advantage of compound interest, which maximizes long-term wealth accrual.
4. Don’t Spend Money You Don’t Have
The Fed report noted that boomers had less serious credit card delinquency than other generations, and they held just 10% of total credit card debt. You can achieve lower levels of debt, too. To help you get out of your existing debt and avoid taking on more, be sure to create a budget each month and pay with cash or your debit card instead of charging purchases.
5. Think Like Warren Buffett
Wealthy boomers tend to think like Warren Buffet — a mindset that leads to significant wealth accumulation. Buffet is one of the richest people in the world. With a net worth of approximately $118.8 billion, according to the Forbes Real-Time Billionaires List, he still lives in the same home in Omaha, Nebraska, that he purchased in 1958 for just $31,500.
Known for his frugality, Buffett is a prime example of someone who knows that you don’t need a grandiose lifestyle to live well.
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This article originally appeared on GOBankingRates.com: 5 Ways Wealthy Boomers Are Better at Money Than You — and How To Steal Their Secrets