With the right financial plan in place, you could easily glide into wealth even if you just consider yourself “comfortable” but not rich. Whether you own real estate or stocks, bonds and alternative investments in a retirement account, estate planning makes life a lot easier for your Michigan loved ones. A recent piece by huffingtonpost.com claims there are four money habits shared by the super wealthy. In their recent book, “The Thin Green Line: The Money Secrets of the Super Wealthy,” authors Paul Sullivan and Brad Klontz look at the difference between those in the top 10 percent and those in the top one percent of income. By working with an astute Michigan elder law and estate planning attorney, you can make sure the wealth you do have isn’t lost. Your loved ones won’t have to pay as much in taxes and for probate procedures with an estate plan that’s drawn up right. If you want to maximize the wealth you can enjoy today and leave later to loved ones, consider the money secrets of the rich.
Living below your means
With their research, the authors discovered the top one percent spend less of their money eating out. They also continue to live below their means, buying less ostentatious cars even when they can afford the more expensive ones. A recent article by USA Today offers retirees tips on drawing down their retirement funds. When you withdrawal your retirement money to live on, you lessen the powerful effects of compounding. USA Today recommends making a spending plan. If you withdrawal no more than 4 percent of your assets, you won’t outlive your retirement savings but you won’t have as much to leave for your beneficiaries. Living below your means makes a real difference.
Using different mind tricks
Wealthy people stick to budgets, but use different mind tricks to they create more wealth over time. Have money automatically moved from your checking to your savings account when you get a paycheck or a social security check. Re-invest dividends in your retirement and investment accounts so the stocks, mutual funds or exchange-traded funds continue to grow. Another idea is to use the “bucket system,” for budgeting. The authors found people who put money in jars even if they are fictitious jars designated for different expenses manage their money better and feel less stressed about budgeting.
Expecting setbacks in life
Super wealthy people don’t take self-responsibility for their actions. They don’t just let life happen around them, but plan for problems, obstacles and financial emergencies. The authors found extremely wealthy people know they make or break their own success, while poor people tend to think they just have bad luck. One of the great thing about estate planning is it lets you manage outcomes. In most cases, the outcome will be positive as you leave a legacy for loved ones, relatives and charities.
Sharing what you have
Another money habit shared by the one percent is the desire to help other people. Your estate plan can include donations you want to make to charities and to family members. The more money you have, the more you can help others through philanthropic causes.
If you don’t have a will or an estate plan, it’s important to get one in place. Many people feel surprised by how much their home appreciates in value and how much their retirement accounts grow. Meet with elder law and estate planning attorney Christopher J. Berry to set up a Michigan Retirement Plan Trust. Berry and the Elder Care Team will answer all of your retirement planning and estate planning questions so you can avoid probate and leave a powerful legacy. For more information about estate planning and protecting wealth, please contact us.