How to Create Wealth as Income Grows

  • Short-term dollars: One bucket often used is your savings account, which should hold 3–6 months of living expenses.
  • Mid-term dollars: These are dollars that are typically held within investments and are not incredibly risky but allow us to earn above inflation, based on an individual’s risk tolerance. Cash has a negative return and is very expensive as it doesn’t keep up with the actual cost of the dollar. Beyond our savings, we need our dollar to earn to create wealth.
  • Long-term dollars: These dollars are may be meant for retirement and can be more aggressive as we shouldn’t need to access them, dependent on your risk tolerance. We must be mindful of tax consequences with these dollars by being balanced in our savings approach, this is also based on an individual’s risk tolerance.
  • Far too often, not having a financial plan prevents women from reaching their goals. Fear is often eliminated when you have a plan, accountability and the guidance to reach your goals.
  • Despite what it may look like, nobody has life completely mapped out or can predict the future. It’s important to have an experienced financial professional to help you prepare for the future, plan for life’s financial milestones and work to reach your financial goals.
  • Financial strategies can change over time, depending on changing life experiences. This may include going back to work or leaving work to care for children or older relatives.
  • Volatility in the investment markets can significantly affect your retirement income and savings. Cash reserves, long-term planning, guaranteed income sources and proper asset allocation through a risk adjusted investment profile can help mitigate the markets impact. For many, taxes are one of the largest annual expenses in retirement.

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