Yahoo Finance 6 Subtly Genius Ways Americans Are Becoming More Wealthy in 2024
Wealth is a term that might sound unreachable for many people, often associated with celebrities, hedge fund managers or billionaires. But the truth is, wealth is how you define it and it can look like many things, such as physical assets, increasing your income, getting great returns on investments and so on.
Though inflation is high, the American economy is still riding strong, and it’s a great time to increase your own wealth.
Financial experts explain some subtle ways Americans are becoming wealthier through a variety of methods.
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Investing in High-Yield Savings Accounts
There’s one great benefit to high interest rates, according to Justin Godur, a finance advisor and the founder of Capital Max — the return on high-yield savings accounts is higher than it’s been in a while.
“With the current interest rates on the rise, one of the simplest yet most effective strategies has been shifting funds into high-yield savings accounts,” Godur said.
“I’ve seen clients earn significantly higher returns compared to traditional savings accounts, making this a no-brainer for anyone looking to optimize their savings without additional risk.”
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Diversifying With Real Estate Investment Trusts
People who have success in investing understand that “diversification remains a cornerstone of wealth growth,” Godur said.
One especially lucrative method of investing is in real estate investment trusts.
“REITs offer a way to invest in real estate without the hassle of direct property management. My clients have enjoyed steady income streams and capital appreciation from REITs, especially as the real estate market continues to show resilience,” Godur said.
Using Tax-Advantaged Accounts
Another way you can effortlessly grow your wealth is by simply using tax-advantaged accounts, such as IRAs and 401(k)s, that your employer offers.
“With strategic planning, my clients have not only reduced their taxable income but also leveraged employer match programs to boost their retirement savings,” Godur said. “This approach has provided immediate tax relief and long-term growth, creating a win-win scenario.”
You can even open these accounts if you’re self-employed, and get tax benefits and the magic of compound interest.
Buying Rental Properties
Mark Pierce, CEO and founding partner of Wyoming Trust, pointed out that “Real estate is doing better than ever for clients who invest early.”
He said that since housing costs don’t seem to be taking a downturn anytime soon, short-term rentals for local and international tourists and long-term leases for off-campus students are among the best performing on the market right now.
“It’s a bit of a double-edged sword because the spike in housing prices has slightly upped profits for landlords, but it’s still a pain for tenants. So offering these two types of apartment options where multiple people can split the cost for accommodation works out to the advantage of both property owners and occupants seeking more affordable housing.”
Maximizing Credit Card Rewards and Bonuses
Another savvy strategy Americans are utilizing is maximizing credit card rewards and bonuses, according to Abid Salahi, co-founder of FinlyWealth.
“With strategic planning and discipline, savvy consumers can amass tens of thousands of dollars in cash back, travel credits and other valuable perks annually. At FinlyWealth, we’ve seen a remarkable 35% increase in users actively pursuing reward optimization compared to 2023.”
In one example, a retired couple from Arizona, earned over $7,500 in travel credits last year simply by timing their credit card applications and meeting minimum spending requirements through strategic budgeting, he explained.
“They used these credits to fund an all-inclusive Caribbean vacation, something they wouldn’t have been able to afford otherwise on their fixed income.”
Embracing New Investments
Furthermore, Finly said that Americans are embracing newer investment opportunities.
“Our data shows a 22% uptick in users allocating funds towards alternative assets like real estate crowdfunding, cryptocurrency and peer-to-peer lending platforms,” he explained.
While inherently riskier, these avenues offer the potential for higher returns when approached carefully, and as part of a diversified portfolio.
In a nutshell, the Americans growing their wealth are looking at as many avenues and opportunities as they have at their disposal, and not sitting on money that could be earning interest.
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This article originally appeared on GOBankingRates.com: 6 Subtly Genius Ways Americans Are Becoming More Wealthy in 2024
