The short answer is, yes, estate planning can be a smart move for everyone.
Though it’s not much fun to think about what will happen to your loved ones after you are gone, doing some estate planning early on, and readjusting it as needed throughout your lifetime, can help you prepare for the future and protect the people you care about.
One of the biggest reasons why is that without an estate plan, any assets you have may not go to the people you would have wanted to have them. And, if you have children, you won’t have a say in who becomes their guardian. Not having an estate plan can also create a lot of legal and administrative headaches for your family members and friends.
Contrary to what many people assume, you don’t have to be old, rich, or have children to benefit from making a financial plan for after you are gone.
Read on to learn what estate planning is all about and what you can do to get started.
What Is an Estate Plan?
Estate planning is deciding in advance and in writing who will get your assets and money after your death or in the event that you become incapacitated.
It can be as simple as designating certain people as your beneficiaries on your financial accounts. Estate planning also typically includes creating a will. It can also include setting up trusts and creating a living will that can be used should you ever become incapacitated.
Your “estate” is simply everything you own — money and assets, including your home and your car — at the time of your death.
Your debts are also part of your estate. Anything you owe on credit cards and loans may have to be paid off first by your estate before any further money or assets are distributed to your heirs.
Estate planning is not entirely about money, though. It may also leave instructions for how your incapacitation or death may be handled. For instance, you may not want to be kept on a life-support system if you were in a coma. You may want to be cremated instead of buried. These instructions can be included in your estate planning.
An estate plan may also include choosing a guardian for your children and any specific wishes regarding how you want them to be raised. 💡 Quick Tip: We all know it’s good to have a will in place, but who has the time? These days, you can create a complete and customized estate plan online in as little as 15 minutes.
The Importance of an Estate Plan
An estate plan can be beneficial no matter what your age, income, assets, or family status. Below are some key reasons why you may want to consider estate planning.
You Decide Where Your Assets Will Go
If you don’t have beneficiaries named in an estate plan, the courts will determine who gets your assets. That might be your closest kin (possibly someone you wouldn’t want to have your inheritance), and if you have none, the state may take those assets.
Likely you have someone who you would prefer to leave assets to, and if not, you can choose a charity.
You Have Children
If you have children, it’s important for you to consider how you want them cared for if you and your spouse were to pass away, and who you would want to be their guardians.
Your estate plan can even outline how you hope to pass on aspects of your life such as religion, education, and other values. You can also set up a trust so that your children receive an inheritance once they are 18.
It Can Help Avoid Legal Headaches
If you have beneficiaries you want to leave your assets to, having an estate plan and/or will can minimize the legal headache your loved ones have to deal with.
Without any kind of estate plan, a probate court may have to determine how assets are divided, and this can take months or years, delaying those assets making it to the people you want to have them.
It Can Help Prevent Family Conflict
Your family members may all get along well, but it’s a good idea to write a will so that things remain harmonious.
Regardless of the size of your estate, some careful estate planning can help prevent your family members from arguing over who gets what, whether it’s a small tiff or a full-on lawsuit.
It Can Ease the Financial Burden of Final Costs
Many people don’t consider planning their own funerals, and that may leave an emotional and financial burden on their loved ones.
A funeral can cost, on average, around $7,900, and a cremation about $6,900. Consider whether your loved ones would be in a financial situation to be able to afford to cover that expense, plus any others involved with your final arrangements.
Taking these final costs into consideration can be a part of your estate plan. You might decide to set aside funds to cover your funeral expenses.
You can do this with a “payable on death” account, which can be set up through your bank and allows the designated beneficiaries to receive the money in the account when you pass away.
Or, you might elect to purchase a prepaid funeral plan, which sends money directly to the funeral home to cover a casket, floral arrangements, service, and other aspects of your funeral. You may want to keep in mind, however, that prepaying for a funeral can lead to a loss of money if the funeral home goes out of business.
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What’s Included In an Estate Plan
While your estate plan will be unique to your own situation, there are a few things you might consider including.
A Will
Your will is the actual document that outlines who your beneficiaries are and what they will receive upon your passing. It may also identify a guardian if you have young children.
This is also where you can identify the executor, who will carry out the terms of your will.
Recommended: What Happens If You Die Without a Will?
Life Insurance Policy
Having this policy information with the rest of your estate plan makes it easy for your family to file a claim with your insurance company upon your death.
A Living Will
Death is not the only situation in which you may be unable to make a decision. You may be alive yet incapacitated, and in this scenario it can be difficult for your loved ones to know what you want them to do.
Writing a living will can be highly valuable because it lays out how you want to be treated during your end-of-life care, including specific treatments to take or refrain from taking.
A living will is often combined with a durable power of attorney, a legal document that can allow a surrogate to make decisions on behalf of the incapacitated individual.
Letter of Intent
This letter is directed to your executor, and provides instructions for carrying out your wishes in regards to your will, and possibly also funeral arrangements.
A Trust
If you have a sizable inheritance for your beneficiaries and don’t want them to have access to all the funds all at once, you can establish a trust with rules about how and when they receive the money.
For example, you could stipulate that your children receive a fixed allowance each month until they graduate college or get married, or that they use the money for college. 💡 Quick Tip: A trust is a customized estate planning tool that can be helpful for your heirs in addition to a will.
Key Account Information
You might also consider providing account numbers and passwords for bank accounts, investment accounts, and other important accounts that your family will need access to. This can make life much simpler for your loved ones.
Recommended: What Is the Difference Between Will and Estate Planning?
The Takeaway
Whether you have children and want to ensure they’re taken care of, or you’re single and would like your assets to go to certain people or a charity you care about, it’s wise to have a basic estate plan.
Having a financial plan in place in the event that you pass away or become incapacitated can protect surviving family members from unnecessary financial, legal, and emotional stress.
When you want to make things easier on your loved ones in the future, SoFi can help. We partnered with Trust & Will, the leading online estate planning platform, to give our members 15% off their trust, will, or guardianship. The forms are fast, secure, and easy to use.
Create a complete and customized estate plan in as little as 15 minutes.
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Though most individuals are familiar home insurance, not all home owners are knowledgeable about title insurance. However, this form of insurance can be very helpful in times of need. To determine how it could be of assistance to you, check out our breakdown of title insurance, its benefits, and some common issues that individuals can face in regards to a title.
What is Title Insurance?
In a nutshell, title insurance covers events that may have happened before the date a title was issued to a new party, and it does not cover events that happen after issuance. In other words, it protects the new owner from any missteps of the previous owner.
Before a new title insurance policy is issued, an insurer will do a title search. This search tends to reveal a number of possible issues:
incorrect names on the title
improper vesting
incorrect notary acknowledgements
outstanding mortgages
tax liens
court judgments
easements
Thankfully most of these issues can be cleared up and the insurance process may move forward. With the lender doing this in-depth search ahead of time and making sure that the titles are clean before insuring them, the risk of claims being filed is greatly decreased.
For this reason, many title insurance fees are relatively low. In fact, many require only a one-time fee. This also helps to protect the individual seeking to obtain the title. If there are any issues that arise that cannot be cleared ahead of time, individuals could decide that it is not a proper investment.
Common Title Problems
Even considering the diligence that goes into researching and clearing titles, there are still title problems that individuals may face. Fraud is a major component to possible issues. Prior owners may have forged documents, power of attorney, mortgages or satisfactions or releases of mortgages.
Even worse, they could impersonate the true owner of the property all together.
There could also be instances where an individual is unintentionally committing fraud, if they think they have the power to sell a property but do not. This scenario is more prevalent in cases of inheritance, divorce, spousal death, dealing with minors, incompetence, or undisclosed heirs.
Outside of fraud there are a few other instances where individuals may have issues with purchased titles. Individuals may purchase a clean title, yet have limited or restricted access to the property. There could also be some unintentional issues with documentation, such as:
errors and omissions in transcriptions
failure to preserve original instruments
incorrect indexing
lack of authority of notary
inadequate descriptions
incorrect interpretations of wills
invalid tax titles
These issues may not be easy to address and may prevent the sale of title indefinitely. Unfortunately, for those who may have already begun the process to purchase a title, these issues can lead to financial loss if the problem cannot be rectified.
Along with issues directly with the title, there are some concerns that individuals should address with title insurance itself. There are two types of title insurance:
Owner’s policy: This policy protects the buyer in the case of an issue with the title.
Loan policy: This policy protects the lender should there be any issues with the title.
It is important for buyers to know the difference between the two to ensure that they are fully protected.
Benefits of Title Insurance
There are a few different benefits to obtaining proper title insurance. Quality insurance policies offer protection against additional issues beyond the title, including:
zoning or subdivision violations and restrictions
damage to the home due to someone’s easement rights
interested parties refusing to buy land due to a neighbor’s structures that are on the land
These are just a few of the additional benefits to having a quality title insurance policy in place. Working with a representative of an insurer can help to make sure that you are properly covered for common issues that may be faced. However, it is still important to consider coverage for other, uncommon incidents.
Depending upon the area that live in, such as flood zones or affluent neighborhoods, there may be certain aspects that you should consider. Consulting a knowledgeable professional can help you to both understand what issues you may be facing and also plan for your future.
As you can see it is very important to make sure that you fully understand what is title insurance. Making sure that you understand the intricacies of this type of insurance and how it can protect you can aid you in making the best decision for you and your family. For more information or to weigh your options, speak with a local representative in your area.
When you inherit a 401(k) retirement account, there are tax rules and other guidelines that beneficiaries must follow in order to make the most of their inheritance.
Inheriting a 401(k) isn’t like getting a simple inheritance, e.g. cash, property, or jewelry. How you as the beneficiary must handle the account is determined by your relationship to the deceased, your age, and other factors.
Understanding the tax treatment of an inherited 401(k) is especially important, as 401(k) accounts are tax-deferred vehicles, so regardless of your status as a beneficiary you will owe taxes on the withdrawals from the account, now or later.
What Is an Inherited 401(k)?
As the name suggests, an inherited 401(k) is an employer-sponsored retirement plan that is bequeathed to an individual, either a spouse or a non-spouse.
When an individual sets up their 401(k) to begin with, they generally fill out a beneficiary form. This form may include their spouse (if the account holder was married), children, siblings, or others.
In most cases, when the account holder of a 401(k) dies, the account is automatically bequeathed to the surviving spouse, unless the will specifies otherwise. This is not the case if your partner dies and you weren’t married. In that case, the 401(k) does not pass to the surviving partner, unless they are officially designated as an account beneficiary.
What to Do If You’re Inheriting a 401(k)
The rules for inheriting a 401(k) are different when you inherit the account from a spouse versus someone who wasn’t your spouse. Depending on your relationship, you’ll have different options for what you can do with the money and how those options affect your tax situation.
Remember, a 401(k) is a tax-deferred retirement account, and the beneficiary will owe taxes on any withdrawals from that account, based on their marginal tax rate. 💡 Quick Tip: Did you know that a traditional Individual Retirement Account, or IRA, is a tax-deferred account? That means you don’t pay taxes on the money you put in it (up to an annual limit) or the gains you earn, until you retire and start making withdrawals.
Inheriting a 401(k) From a Spouse
A spouse has a number of options when inheriting an IRA. But be careful; there are a number of wrinkles given that the rules have changed in the last few years.
• You could rollover the inherited 401(k) into your own 401(k) or into an inherited IRA: For most spouses, taking control of an inherited 401(k) by rolling over the funds is often the smartest choice. A rollover gives the money more time to grow, which could be useful as part of your own retirement strategy. Also, rollovers do not incur penalties or taxes. (But if you convert funds from a traditional 401(k) to a Roth 401(k) or a Roth IRA, you will likely owe taxes on the conversion to a Roth account.)
Also remember that once the rollover is complete, traditional 401(k) or IRA rules apply, meaning you’ll face a 10% penalty for early withdrawals before age 59 ½.
And when you reach age 73, you must start taking required minimum distributions (RMDs). Because RMD rules have recently changed, owing to the SECURE Act 2.0, it may be wise to consult a financial professional to determine the strategy that’s best for you.
Recommended: How to Make a Will
• Take a lump sum distribution: Withdrawing all the money at once will not incur a 10% early withdrawal penalty as long as you’re over 59 ½, but you’ll owe income tax on the money in the year you withdraw it — and the amount you withdraw could put you into a higher tax bracket.
• You can reject or disclaim the inherited account, passing it to the next beneficiary.
• Last, you could leave the inherited 401(k) where it is: If you don’t touch or transfer the inherited 401(k), you are required to take RMDs if you’re at least 73. If you’re not yet 73, other rules apply and you may want to consult a professional.
Inheriting a 401(k) from a Non-Spouse
The options for a non-spouse beneficiary (e.g. a child, sibling, etc.) are far more limited. For example, as a non-spouse beneficiary you cannot rollover an inherited 401(k) into your own retirement account.
• You can “disclaim” or basically reject the inherited account.
• If the account holder died in 2019 or earlier, you can take withdrawals for up to 5 years — as long as the account is empty after the 5-year period. If the account holder died in 2020 or after, you have 10 years to withdraw all the funds. You must start taking withdrawals starting no later than Dec. 31 of the year after the death of the account holder. These rules are known as the 5-year and 10-year rules.
• A positive point to remember: If you are a non-spouse beneficiary and younger than 59 ½ at the time the withdrawals begin, you won’t face a 10% penalty for early withdrawals.
The exception to this rule is if you’re a minor child, chronically ill or disabled, or not more than 10 years younger than the deceased, you can take distributions throughout your life. 💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.
How RMDs Impact Inherited 401(k)s
If the account holder died prior to Jan. 1, 2020, anyone can use the so-called “life expectancy method” to withdraw funds from an inherited IRA. That means taking required minimum distributions, or RMDs, based on your own life expectancy per the IRS Single Life Table (Publication 590-B).
But if the account holder died after Dec. 31, 2019, the SECURE Act (also known as the “Setting Every Community Up for Retirement Enhancement Act of 2019”) outlines different withdrawal rules for those who are defined as eligible designated beneficiaries.
What Is an Eligible Designated Beneficiary?
To be an eligible-designated beneficiary, and be allowed to take RMDs based on your own life expectancy, an individual must be one of the following:
• A surviving spouse
• No more than 10 years younger than the original account holder at the time of their death
• Chronically ill
• Disabled
• A minor child
Individuals who are not eligible-designated beneficiaries must distribute (i.e. withdraw) all the funds in the account by December 31st of the 10th year of the account owner’s death.
Eligible-designated beneficiaries are exempt from the 10-year rule: With the exception of minor children, they can take distributions over their life expectancy.
Minor children must take any remaining distributions within 10 years after their 18th birthday.
How to Handle Unclaimed Financial Assets
What if someone dies, leaving a 401(k) or other assets, but without a will or other legally binding document outlining the distribution of those assets?
That money, or the assets in question, may become “unclaimed” after a designated period of time. Unclaimed assets may include money, but can also refer to bank or retirement accounts, property (e.g. real estate or vehicles), physical assets such as jewelry.
Unclaimed assets are often turned over to the state where that person lived. However, it is possible for relatives to claim the assets through the appropriate channels. In most cases, it’s incumbent on the claimant to provide supporting evidence for their claim, since the deceased did not leave a will or other documentation officially bequeathing the money to that person.
The Takeaway
Inheriting a 401(k) can be a wonderful and sometimes unexpected financial gift. It’s also a complicated one. For anyone who inherits a 401(k) — spouse or otherwise — it can be helpful to review the options for what to do with the account, in addition to the rules that come with each choice.
In some cases, the beneficiary may have to take required distributions (withdrawals) based on their age. In some cases, those required withdrawals may be waived. In almost all cases, withdrawals from the inherited 401(k) will be taxed at the heir’s marginal tax rate.
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In February 2020, Tenisha Tate-Austin and Paul Austin decided to erase all traces of their existence in the Northern California home the Black couple had created for themselves and their children.
They “whitewashed” their home by removing their family photographs and African art displayed around the house. They had a white friend place some of her own family photographs around the home and greet the appraiser as if she were the homeowner.
The couple wanted to see if they’d get a better home appraisal than the one they had received three weeks earlier.
The experiment worked. This time, the appraisal (by a different appraiser from the same appraisal management firm) was almost 50% higher. In three weeks, the value of their Marin City home, 11 miles north of San Francisco, had gone from $995,000 to $1,482,500.
In March, the Austins settled a fair housing lawsuit alleging race discrimination against the licensed real estate appraiser; they’d reached a settlement in October with the appraisal management company.
Sixty years after Martin Luther King Jr. delivered his most iconic speech calling for civil and economic rights and an end to racism, one of the biggest roadblocks to building wealth for Black Americans is still in place: The housing gap has widened from the time it was legal to discriminate based on race.
In 1960, eight years before the Fair Housing Act, which prohibits property owners, financial institutions and landlords from discriminating based on race, the homeownership gap between white (65%) and Black (38%) stood at 27 percentage points. In 2021, or 60 years later, that gap had grown: 73% of white households owned a home compared with Black homeownership at 44%, a difference of 29 percentage points, according to the Urban Institute.
“We missed out on a better interest rate because of the unfair appraisal we received,” Tenisha Tate-Austin said in statement through her lawyer. “Having to erase our identity to get a better appraisal was a wrenching experience. We know of other Black families who either couldn’t get a loan because of a discriminatory appraisal and therefore either lost the opportunity to buy or sell a home, or they had to sell their home because they had an unaffordable loan.”
Explore the series:MLK’s ‘I have a dream’ speech looms large 60 years later
Housing gap:‘We are a broken people’: The importance of Black homeownership and why the wealth gap is widening
King fought racist housing practices in ChicagoThough King knew housing was an important topic when he made his 1963 speech (it included the line “We cannot be satisfied as long as the Negro’s basic mobility is from a smaller ghetto to a larger one,” his focus was ending segregation in the South, said Beryl Satter, professor of history at Rutgers University in New Jersey and author of “Family Properties: Race, Real Estate, and the Exploitation of Black Urban America.”“The speech was about jobs and ending segregation of drinking fountains and restaurants, buses, trains, movie theaters and swimming pools to help pass the Civil Rights Act,” she said. Once that was accomplished, King trained his sights on housing in the North, particularly Chicago, where he focused on enforcing a pre-existing law on open housing, Satter said.The open housing laws in Chicago already forbade real estate agents from steering Black families into Black neighborhoods and dictated that housing should be made available regardless of race.“But like many such open housing laws, it was not enforced,” Satter said.In January 1966, King moved with his family into an apartment in North Lawndale on the West Side of Chicago to bring attention to the poor living conditions of Black families living without water, electricity and heat. He marched with Black and white supporters into segregated white neighborhoods to call for open housing.“And there he was met with the most violence he had ever been met with in any of his civil rights struggles. He said that the violence in Chicago made the whites in Mississippi look good,” Satter said. “He was hit with a stone while marching in Chicago, and he kept going.”Fair Housing Act became law after King’s deathFrom 1966 to 1967, Congress regularly considered a fair-housing bill, but it was ultimately defeated.“It was the first time that a Civil Rights Act had been defeated since the ’50s,” Satter said. “There was massive white resistance to any law or direct action that threatened racial segregation and housing. It was something that whites in the North fought to the death to keep.”After King was assassinated in 1968, President Lyndon Johnson pushed through the national Fair Housing Act as a memorial to King, whose name had become closely associated with the fair housing legislation.The undervaluation of homes in Black neighborhoods, decadeslong housing segregation, a systemic denial of loans or insurance in predominantly minority areas, a persistent income gap, and a historically limited ability of Black parents to leave their families an inheritance have contributed to the nation’s financial disparity, experts say.
During the housing boom of the early 2000s, Black Americans ages 45 to 75 disproportionately held subprime mortgages, loans offered at higher interest rates to borrowers characterized as having tarnished credit histories. Many of these mortgage holders lost their homes and have been unable to return to homeownership.
These trends will affect retirement prospects for Black Americans and their ability to pass down wealth to the next generation, making it not just one generation’s problems but an intergeneration disparity, experts say.
White wealth surpasses Black wealth
In 2016, white families posted the highest median family wealth at $171,000. Black families, in contrast, had a median family wealth of $17,600, according to the Federal Reserve. Homeownership has long been considered the best path to build long-term wealth, so increasing the rate of homeownership can play an important role in closing the wealth gap, experts say.
Over the past decade, the median-priced home in the United States gained $190,000 in value, making the typical homeowner 40 times wealthier than if they had remained a renter, according to a report released in April by the National Association of Realtors.
Some signs of hope emerged during the coronavirus pandemic, when mortgage rates were at historic lows.
During that time, Black homeownership rates increased by 2 percentage points, surpassing the white homeownership rate, which increased just 1 percentage point.
The historically low mortgage rates enabled high-earning, highly educated Black households to boost homeownership rates. Most high-income white households already were homeowners, which explains the smaller magnitude of growth, according to the analysis.
Black homeownership rate saw small improvements
From 2019 to 2021, the homeownership rate for Black households went from 42% to 44%; for white households it went from 72% to 73%.
After experiencing a continuous decline since the Great Recession, the Black homeownership rate finally made gains between 2019 and 2021. The reason was pent-up demand, said Jung Choi, a researcher at the Urban Institute.
“This suggests that affordability really matters,” Choi said. “Now, with the surge in interest rates, we are already seeing a sharp decline in Black homebuyers as well as younger homebuyers.”
Satter said King’s final book, 1967’s “Where Do We Go From Here: Chaos or Community?” cautions against complacency simply because there are laws on the books.
“He really understood that having a law in books was the beginning, not the end. Today we have the Fair Housing Act of 1968, and there are ongoing local, state and national laws that are supposed to stop housing discrimination,” Satter said. “I think King would have predicted that they would not be effective if there wasn’t a larger public will to enforce it and a strong political organization pushing to enforce it.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
The Fed recently announced yet another interest rate hike, making borrowing more expensive and pushing the prospect of purchasing a new home out of reach for an even greater share of Americans. At the same time, inflation is easing and the economy is showing unanticipated strength, with strong employment numbers and greater than expected GDP. All this means one thing for current and prospective homeowners – they shouldn’t expect the Fed to begin lowering rates any time soon.
Though this would typically signal a time for panic across the residential real estate profession, those who can focus on servicing their clients with a mind for the future will be well positioned for whenever the economics for home buying become more favorable.
Double down on relationship building
High mortgage rates mean those on the margins of potential homeownership are moved one step further away from their goal. It also means those currently in homes — some of whom purchased or refinanced through the historical low interest rate period after the pandemic — are disincentivized to buy a new home at current rates. Furthermore, for those looking for their next home, higher interest rates effectively reduce their buying power, translating literally to fewer and fewer square feet, bedrooms and bathrooms.
Real estate teams may lament homeowners’ waning interest in buying (or selling) into this market. But there are things real estate pros can do to make productive use of the moment, and double down on relationship building with new and existing clientele.
Educate and update
Stay connected. One of the biggest mistakes real estate professionals can make, regardless of the market, is not staying in touch with clients. Real estate can be a transient profession with many newcomers flocking to the industry when times are good, and falling out when times are tough. Times are decidedly difficult right now, reducing deal flow and overall revenue potential. Many will see the moment worthy of a pullback in their efforts, focusing on clients with a greater, real or perceived, likelihood of being able to transact. That state of mind is an absolute mistake.
Provide clients with market updates. Sharing recent news and its practical implications with current and prospective clients is an excellent way to check in and ensure they have a strong understanding of what impact rate increases, strong economic numbers and more will have on their immediate transaction prospects. Whether buying or selling a home, real estate pros who help their client base to have a clear understanding of what is happening, why, and what impact it will have, take advantage of a unique trust building opportunity. They provide clients with extra reassurance that they are indeed receiving good counsel on their (eventual) property endeavors.
Track and report on falling prices. High mortgage rates hurt home buying and selling prospects. However, for some, higher interest rates can bring home prices down just enough to account for the added cost of a higher interest rate. In some scenarios, if a prospective buyer can carry a more expensive rate, they may secure a home at a lower price, and then aim to refinance when rates have improved.
Understanding and activating home equity. Hikes in interest rates also affect the price of revolving debt. Most, if not all, revolving credit moves with the prime rate; meaning, it just got even more expensive to carry a balance from one month to the next.
Real estate professionals can educate clients on the prospect of leveraging the equity they have in their current home to consolidate consumer debt through home equity based products like HELOCs, home equity loans or other home equity based products, that tend to have better terms than other forms of debt. Home-equity products also provide a path to financing home improvement projects that can raise the value of a home, while clients wait for the environment for putting a home on sale to improve.
Keep the door open. Financial situations are constantly in flux. Did a client recently get a new job? Did a relative pass away leaving them with a large inheritance? Did your clients just become empty nesters? New occurrences in life bring about different new ways to view possibilities. No one wants to buy a home for more money than they have to, but new circumstances can open the door to revisiting property aspirations that weren’t reasonable conversations just moments before. Keeping an open door to those who have new circumstances will help real estate pros adjust their approach for specific clients.
Unprecedented and unfamiliar economic cycles like the one we are in today provide a great deal of room to drop the ball or lose interest. Those real estate teams that refocus on the basics of building trust through credible counsel and insight will see more deeply engaged client prospects, and eventually, transactions that can keep the business afloat during a time when the entire industry is facing headwinds.
Jeff Levinsohn is CEO and Co-Founder of House Numbers, a service to help homeowners gain financial independence by understanding and optimizing their largest asset — their home.
Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old. The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I…
Hey everyone! Today, I have a great savings story to share from a reader named Nichole. She will be talking about how she went from -$20,000 to a six-figure savings by 26 years old.
The following will be outlining my experience getting scammed and how it catapulted me into learning about how money works. I will divulge all the things I’ve done to earn a six-figure savings, pay off over $20,000 in debt and stay consistent with saving for a home to pay cash. I will go over the importance of knowing your “why” and how it has a large part in saving money. I believe we all have the ability to be successful with our finances and sharing my story hopefully encourages you to stay motivated during your own journey.
Since I was a little girl I’ve always yearned for independence and responsibility. My mother tells the story like this:
“It was your first week of kindergarten and I walked you to the bus stop to drop you off. You didn’t even let me drive you that first day! When I met you at the bus stop after school at 2pm you look at me and say “mom, you don’t need to pick me up from the bus stop, I can walk home without you”. I had to explain to you that wasn’t allowed because you were only five years old and the school didn’t allow that.”
The moral of the story is, if I could do it on my own I did.This included making money so I could buy my own stuff.
Throughout elementary and middle school I sold things to make money: lanyards, bracelets, candy, even offered to do peoples homework for $5 in 6th grade!
Earning money gave me more independence to pay for the things I wanted, so I always stayed motivated.
My parents never talked much about money, I just knew we had everything we needed and more. We were very middle class.
I was taught to avoid debt but to always have a credit card just in case an emergency happens. Oh, and you’ll always have a car payment, so get used to it
It wasn’t until sixteen years old that I learned my parents were always one catastrophe away from losing everything.
In 2008 my parents lost the home they custom built because they took out a no interest loan that they couldn’t afford once it ballooned.
This changed something in me, my world was shaken and I never knew it had a weak foundation to begin with.
I started to view money a different way.
I wanted it but didn’t know how to keep it safe from others that could take it away from me, like what my parents experienced. I didn’t want to repeat their money mistakes.
Fast-forward to 21 years old, I got married to my husband and best friend, yes so young, I know!
The following two years were spent finishing up my Bachelors in Communication and attempting to pay off our debt, we had about $20,000 wrapped up in student loans, credit cards and a car accident.We didn’t know much about money and we were still living with parents to try and save for a down payment for our first home.
This is how it’s supposed to work right? College, marriage, buy a home and have a baby. In that order.
In 2018, my husband and I put an offer on a home, 2 bed 1 bath fixer upper with a nice backyard and workshop in the back for $230,000.
We were excited for our new adventure but when it came down to our offer and one other, we lost. When we got the news our agent said, “yeah, they offered all cash, you didn’t have a chance”. We thought to ourselves, who the heck has that much money to pay cash for a home?! We brushed it off and figured it just wasn’t our time to buy. Little did we know the irony of this.
I started to really spend my time researching about money and how to leverage it and get rich! My goal was to find the secret sauce to success and wealth. I embarked on a downward spiral of YouTubes algorithm of financial videos and advice. Then I came across a very well-known financial expert that offered FREE courses about how to get rich, how could I pass that up? I signed up for the next free course.
Once there I was greeted with excited faces and tons of energy, oh yes, this was my moment to find the secret sauce! The lady speaking talked about all the homes she owns, the money she makes and extravagant trips she takes, I was hooked. I wanted that life, not my own, I needed change.
By the end of the presentation I was willing to do anything to continue my knowledge on financial freedom, or so I thought that’s what I was going to learn. I was the first person to stand up and run over to the tables full of iPads and “We accept credit” signs. I whipped out my credit card and signed up for my 3-day seminar. I don’t mind paying for education! I already had $13,000 in student loan debt anyway so who cares?!
The day of the seminar comes an I am elated, I am OVERLY ELATED. I couldn’t wait for my husband to share the same excitement I experienced at the last meet up.I was again, welcomed by excited faces and high energy. We had our notebooks, pens and open minds ready to learn how to get rich.
To no one’s surprise, we were let down.
Within 10 minutes of the presentation my husband looked at me with eyes saying “we got duped”. He didn’t have to say anything. Let me paint the picture for you.
The presenter had on a gold and diamond link bracelet and a fancy suit. He yelled and poured water on the floor for dramatic effect, handed out cash and even had us stand on our seats in unison shouting the same corny lines “we are warriors”. He informed us that he was going to teach us to buy homes with a credit card and leverage our credit for the best. He promised for the small price of $15,000 that we would learn all about the secret sauce to the rich *can you hear my sarcasm? *. He said we would have mentors along the way to help us buy these homes on credit. He told us not to come back the next day if we weren’t willing to pay for more classes. And we didn’t.
You get the point, it was a 3 days sale pitch to get us to buy more courses.
We walked to our car, now an extra $600 in debt and feeling like the most gullible people in the world. Christmas was only four days away and we were more broke than before we showed up. We had to sell personal items to have Christmas that year.
A switch went off in my head, I was angry. I was so angry that I fell into this scam, I was angry we didn’t get our home, I was angry we were broke, but ultimately, I was angry for not knowing how to manage my money. This stung extra because I hated the fact that in that moment I became my parents, I made a huge money mistake.
Anger is a funny thing, it can ignite the most creative sides of our brain. I decided I was going to get my money back.
What email did I send them?
A short summary of what I experienced and that they had 48 hours to get back in contact with me before I went to social media to expose them and my experience. I received a full refund the next day, with no response, even to this day.
Scorned is a nice way to put it.
I was now on a mission to learn all I could about how money REALLY works.
And so, I went back to my faithful teacher…YouTube of course!I searched and watched hours of videos until I came across one that made sense to me. A lot of financial jargon can be thrown around with no explanation, I don’t like that. I believe if someone can’t explain it easily then they don’t know enough about the subject to begin with.
Then I found the video that made sense: common knowledge and nothing you haven’t heard before (funny how that works).
I acknowledge that everyone has a different stance on money management and I take the view of, “to each their own”. I don’t think there is one “right” way but I found that following this new plan I was able to save more and feel good doing it than I ever did before.
These are the principles I followed, and they worked!
To put them simply they are:
1: $1,000 to start an Emergency Fund
2: Pay off all debt using the Debt Snowball
3: 3 to 6 months of expenses in savings
4: Invest 15% of household income into Roth IRAs and pre-tax retirement
5: College funding for children
6: Pay off home early
7: Build wealth and give
And then there is 3b – Save up for a home. This step is after you save your 3-6 months emergency fund and the current step I am on.
I had an epiphany, if I am in $13,000 worth of debt, and then add another $230,000 of debt for a house and a new car, then I’m going to be in some serious trouble with my monthly bills and interest I’m accruing. MOST Americans live like this. Banks don’t pay Trillions of dollars toward advertising if it didn’t work. Yes, I said “T”.
We paid off my student loans in full that day. I wish this was the end of our debt story but it is not.
My husband, who at this point in our journey is a new real estate agent, started to use a secret credit card to pay for real estate fees. We could have budgeted for these expenses but the shame of using the money I earned and him not contributing got the best of his ego. He bought a $200 chair for his new office, accrued office fees, all new clothes, etc…
Meanwhile I thought we were debt free and his parents were being nice by supporting his new venture! It is important for him and I to mention this part in our story because many people can relate to these feeling surrounding money: shame, guilt, and failure. It is a team effort.
Our social stigmas can convolute our ideas about money within a marriage. We are taught that the man makes the money, but sometimes the story doesn’t work like that and that’s ok!
The good news is, we’ve grown from this experience. We now work so closely with our money that we are each other’s cheerleader and in it to win it!
Since our journey has started we have:
Paid off my student loans— $13,000
Paid off all our credit card debt and consumer debt— $7,000
Paid off my car— $4,000
Paid for TWO cars CASH: A 2007 Volkswagen Jetta and then a 2012 Jaguar XF Portfolio to replace it when it died (quite a step up!) This is how we saved and bought our Jaguar cash summing— $14,400
Bought new appliances and toilets for my mother in laws home— $4,000
Given away money with a generous heart every.single.month (it’s part of our budget)
Accrued a six-figure savings and are on track to buy our first home cash in 2022!
How did we do it?
First, I’d like to mention, we are very normal people with normal jobs. I work in education and my husband is a real estate agent.
We didn’t invest in a stock that suddenly went up, win the lottery or get an inheritance.
We worked our butts off to get to this point in our journey and we still are.
Many people can do this and it starts with visualizing it and then believing you’ll get there.
We found out through our process it is exactly that, a process.
How we saved over six figures:
Following steps 1-7 about saving, investing and giving
Staying consistent! I can’t mention this enough, even if we go over our budget one month, we hop right back onto the savings wagon the following month
Side hustles—we have done it all! I was the cleaning lady at my job for 5 months, I baked cakes (and got quite good at decorating them), I made epoxy key chains, sold items we didn’t need, took on EVERY OT opportunity at work including working an extra 4 hours on top of regular work hours with students to help them during COVID, the list goes on. We take advantage of all extra earning opportunities
Cut down on spending—believe it or not anything outside of our bills and expenses we only allocate $200 a month for. This includes: toothpaste, if we need clothes, going out to dinners/lunch/with friends, medications, etc… Once the money is gone, its gone! Yes, I shop at Goodwill a lot and coupon hunt!
Cut out streaming services and use a family members account (one day we will get it back)
Use cash envelopes—We use this for bills that aren’t online to avoid going over our budget
Use a zero-based budget—We practice a zero-based budget approach with our money—all the money left over after our bills and expenses goes straight into the home savings. Read more about how this budget works here https://elizabethandinez.com/what-is-zero-based-budgeting-and-why-it-works/
Switch phone companies—we saved over $50 a month that went toward our home savings! We gave ourselves a raise!
Start a blog. My cousin and I started a blog and sell financial sheets on Etsy
Start giving to others every month. This is a part of our budget and the most fun you will ever have with money. Sometimes it’s to a waitress, a mother in a store buying food for her kids, a super awesome pet groomer, someone in a restaurant we want to get the bill for and most of the time its anonymously! Giving does something to the heart and is a huge part of our bigger picture of “why” we are doing what we are doing.This keeps us motivated to do more and stay the course. Having a bigger reason for why you save is a key factor for staying consistent
Stay diligent—we take every day as our opportunity to put extra into our savings
Meet with an accountability partner— We meet weekly to do a budget overview—this is important because we are each other’s accountability partners.
Practice putting out into the world what you want to receive, for example, a positive attitude! It’s amazing what happens when you attract positive outcomes, they come right back.
Visualize your goals and set intentions for them—this plays a large role in our success. We have charts around our room showing us our progress and how far we have come. Starting with the image in your head while also setting intentions for that goal will turn into real results! I suggest looking into videos or books on the Law of Attraction.
Open a Money Market account to help with depreciation and earn a little interest as you save. This is also good because the money isn’t as easily available as a checking’s would be. We get about $50 every month for FREE from interest
Attend a financial class—We’ve done this FIVE TIMES to be around likeminded people trying to get out of debt and follow the same plan. We know the information like the back of our hand but it is not about the knowledge, its about the behavior
Know your why
When you have a big enough “why” for the goal you are setting it becomes almost like second nature. You find ways to make it happen.
A good example (but a sad one) is if you have a sick child and not enough money for the surgery or appointment. Because your why for saving is so strong you are going to do EVERYTHING in your power to raise that money and make it happen, no matter what.
Without your why, the process is going to be daunting and drag.
You need motivation behind your goal, so find it.
Why are we saving like crazy anyway?
We decided we want to create generational wealth for our families. Money does not make you happy in life but it does clear up a lot of problems and make it possible to help others. We want to be able to take care of our family for generations.
We also want to be able to give to others. We give with open hands, not clinched ones. If you picture an open hand for a moment, palms up and open to receiving and letting go, vulnerable, not clinching, willing. Having an open hand allows money to flow freely in and out. Being open and quick to give to others rather than holding it tight allows you to see the miracles that money can make in another person’s life. We want to fill our cup to the top so that it pours over and we have enough to fill others.
Our plans for the future to become millionaires:
Buy our home cash
Up my work investing to 5% into my 403b for the complete company match
Put the max amount of $6,000 into each of our ROTH IRAS (as of 2021 that is the max amount allowed) We will set up automatic payments every month of $500 into each account to ensure we are hitting those highs and lows of the market every month
Save for a commercial real estate property
Save for rental properties. Because my husband is a real estate agent we are very interested in investing our money into real estate and handling rental properties in our area, specifically rehabbing trustee sales
Open a real estate brokerage account. This is one of our long-term goals and will one day be an investment we pay cash for to open
Earn income from the Elizabeth&Inez blog
Give to others so that their lives can be touched by the good in this world
Our journey is far from over but the successes along the way are proof of our bigger picture becoming a reality. We went from -$20,000 in debt to over a $100,000 savings from the beginning of 2019 to June 2021! Follow my blog for financial insight and more updates on our journey!
Do you have any questions for me? Ask away in the comments below.
Author bio: My name is Nichole Yanez and I am a financial blogger at Elizabeth And Inez. I talk about my experience as a millennial living in Southern California trying to buy my first home cash! I work in the field of education but my passion is money management and inspiring others to start their journey to financial freedom. I hope my story brings hope to others that they are capable of changing their family tree with three things: consistency, hard work and diligence. This is my story about financial deception and how it landed me into learning about money and how it works.
Have you ever wondered what a 9-figure amount looks like? It’s a sum of money too big to ignore, with a whopping total of 100 million to less than 1 billion. Discover more about this colossal figure and the wealth it represents
When we mention nine-figure sums, we’re talking about a truly astronomical level of wealth. To put it in perspective, nine figures represent anything from $100,000,000 all the way up to $999,999,999.
This figure surpasses the GDP of several small nations. For instance, Samoa reported a GDP of approximately 843.8 million USD in 2021.
Or consider that according to Investopedia, 7-figure wealth is what puts you among the top 0.1% of the wealthiest people on the planet. This means that having nine figures puts someone at an even more elite level, one whose luxury extends far beyond mere financial freedom.
Only a small fraction of individuals or companies globally can boast such immense wealth. However, it is not an unattainable goal. Let’s take a look at some of the strategies you can employ to accumulate substantial wealth while also examining the lifestyles and pursuits of those who have successfully achieved it.
How Much Is a 9-figure Salary?
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A nine-figure income signifies any earnings that flaunt nine digits, starting from $100,000,000 and soaring upwards. To put it into words, we’re discussing one hundred million dollars.
Quite a mind-boggling figure, isn’t it?
It’s like being handed the keys to a kingdom of unimaginable wealth. But remember, this is a sphere occupied by only a select few worldwide.
Their playgrounds? Often, you’ll find them in the tech sector, inheriting vast wealth or expanding an already thriving family business.
Now, let’s delve a bit deeper, shall we?
When we speak of nine figures, are we referring to the lower end close to one hundred million, the middle ground around 550,000,000, or the staggering high end nearing 999,999,999?
So, the next time you find yourself daydreaming about a nine-figure salary, remember this: It’s not just a number; it’s a lifestyle, a testament to extraordinary achievements, and a beacon of exceptional success.
And who knows? With the right mix of passion, dedication, and a sprinkle of luck, you might just find yourself joining this elite club.
After all, isn’t the sky the limit when it comes to chasing our dreams?
Examples of People Who Earn 9-Figure Incomes
Cristiano Ronaldo: A Sports Icon – With an astonishing income of $105,000,000, this celebrated athlete is not just a football superstar but also a nine-figure earner.
Safra A. Catz: Leading Oracle – As the CEO of Oracle, Safra A. Catz’s leadership prowess is reflected in her staggering earnings of $108,200,000.
David Zaslav: The Discovery Dynamo – Captaining Discovery as its CEO, David Zaslav, commands a whopping $129,500,000.
Nikesh Arora: The Palo Alto Networks Powerhouse – As the CEO of Palo Alto Networks, Nikesh Arora’s genius is rewarded with a hefty paycheck of $125,000,000.
Roger Federer: Tennis Titan – This globally recognized athlete proves that sports can indeed yield nine-figure incomes, as evidenced by his impressive earnings of $106,300,000.
Case Study: What Does A 9-Figure Earning Look Like?
Understanding the intricacies of nine-figure earnings can be a complex undertaking due to the lack of universally defined parameters. For the context of this case study, we will consider an annual income of at least $432K as the lower limit for this category. It is worth noting that any figure below this threshold would classify one into the realm of billionaires.
Renowned business magnates such as Warren Buffet and Mark Zuckerberg exemplify this earnings bracket, with annual incomes reported around $51M and marginally less than $50M, respectively.
Reaching the stature of a nine-figure income earner typically necessitates either a substantial inheritance or proprietorship of a prosperous company with diverse revenue channels. The case of Elon Musk serves as a prime example, with his considerable income derived from two distinct sources – Tesla and SpaceX.
Aspiring for this scale of income undoubtedly sets a high bar. However, with the appropriate strategy and relentless determination, it is not beyond reach. Be prepared to tread a path akin to those who have already achieved this feat.
What Is the Potential Monthly, Weekly, Daily, or Hourly Income in the 9-Figure Range?
How Much Is 9 Figures Monthly?
To figure out the monthly income from a massive annual salary, just divide the yearly amount by 12. Keep in mind that this will give you a range of values. But if you want to earn a nine-figure salary, the smallest monthly income would be $8,333,333.33.
$100,000,000 per year / 12 months
= $8,333,333.33 per month
This question might take a different perspective if you’re raking in 9 figures every month. That means your annual income would be at least $1,200,000,000 or even more.
How Much Is 9 Figures a Week?
If we were to divide the 9-figure annual salary by 52 weeks, we’d be looking at a minimum weekly income that could make anyone’s head spin – a cool $1,923,076.9! 💸💼.
$100,000,000 per year / 52 weeks
= $1,923,076.9 per week
While you’re at it, if you manage to rake in a solid 9-figure sum every week, your annual income will soar to a minimum of £52,000,000,00 or maybe even more.
How Much Is 9 Figures a Day?
Want to know how much you can earn daily from a nine-figure income? Just divide it by 365! If you make money every day, your minimum daily earnings would be $273,972.6. That’s your ticket to the nine-figure club!
Here’s the breakdown:
$100,000,000 per year / 365 days
= $273,972.6 per day
Now, let’s say you take weekends and U.S. holidays off. In that case, you’d need to earn around $381,679.3 per day to make $100,000,000 per year. It’s a good goal to aim for if you want that nine-figure salary without burning yourself out.
How Much Is 9 Figures an Hour?
If you’re seeking a nine-figure income from hourly wages, the calculations are slightly different. Just divide your per day salary by 8 hours, and voilà! The minimum number is $47,709.90per hour. This calculation is based on working days – usually 262 days per year in the US.
How Much Is 9 Figures After Taxes?
Achieving a 9-figure income is quite an extraordinary feat, one that is typically reserved for the most successful entrepreneurs, athletes, and entertainers in our society. It’s almost impossible to reach that level through a single salary alone.
Instead, individuals in this income bracket often have multiple income streams, such as investments, business ventures, and other revenue-generating activities.
Calculating the exact tax on a 9-figure income can be a challenging endeavor. Taxes can vary greatly depending on many factors, including location, type of income, applicable deductions, and more. However, it’s safe to say that anyone earning in the 9-figure range will face a significant tax bill.
What Is the Pathway To Achieving a 9-Figures Income?
If you are in pursuit of a 9-figure income, it is essential to have an understanding of the components that fuel this elusive status. What sets apart these high-net-worth individuals from the rest is their capacity to create multiple streams of passive income and capitalize on them.
Here are some tips to help you achieve this milestone:
Acquire Valuable Skills and Experience
The first step towards achieving a 9-figure income is building a solid foundation of high income skills and experience in a high-value field. This could be anything from technology and finance to entertainment and sports. The key is to become exceptionally good at what you do, often necessitating years of dedication, learning, and practical application.
Build or Join a High-Growth Venture
Next, it’s super important to either build or get involved in a high-growth venture. This could mean starting a business with a game-changing idea or joining a rapidly expanding company in a leadership position. The aim here is to use your unique skills and experiences to create substantial value and wealth, which could potentially lead to a massive income if the venture becomes incredibly successful.
Invest Wisely and Diversify Your Income Streams
Who said you can’t have your cake and eat it too? Investing in the stock market, real estate, bonds, and other alternative investments is another way to generate a 9-figure income. It’s important to diversify your portfolio across multiple strategies so that you’re not overly exposed to any one asset class.
Let’s give you an example.
If you’re already running a successful business, consider investing in cryptocurrency or another digital asset class to increase your income streams. This could provide an additional source of passive income that can help solidify your journey to a 9-figure salary.
Equities and Derivatives Trading
The stock market is an incredibly powerful tool that can help you to achieve a 9-figure income. Through equity and derivatives trading, you can tap into the world’s most lucrative markets and make substantial returns on your investments in a short amount of time.
Learning how to navigate this complex ecosystem of risk and reward requires patience, dedication, and a lot of practice. Start by investing in the stock market or trading on a simulated platform to get comfortable with the process before taking it to the next level.
Leverage Networks and Opportunities
Networking is a critical component of achieving a 9-figure income. By cultivating meaningful relationships with influential people in your industry, you can open doors to opportunities that might otherwise remain closed. These could include partnerships, investments, or high-profile job offers that can significantly boost your income.
Jobs That Pay 9 Figures
Earning a nine-figure salary is an incredibly rare achievement reserved for the top echelons of various lucrative industries. Here are some of the highest-paying jobs and industries that can bring in nine-figure salaries.
Tech Company Bosses
Tech company bosses, particularly those at the helm of companies like Amazon, Facebook, and Tesla, are among the highest earners globally. Their compensation often comes in the form of stock options, which can value in the hundreds of millions or even billions when their companies perform well.
Examples include:
Elon Musk, CEO of Tesla ($242.4 billion)
Jeff Bezos, CEO of Amazon ($151.5 billion)
Mark Zuckerberg, CEO of Facebook ($103.4 billion)
Professional Athletes
In the world of professional sports, athletes like Cristiano Ronaldo, Lionel Messi, and LeBron James have managed to secure contracts and endorsement deals that push their annual incomes into the nine-figure realm. These athletes excel in their respective sports and have built strong personal brands, attracting lucrative sponsorship deals.
According to reports, these athletes earned more than $100 million in a single year:
Hollywood Celebrities
Hollywood is no stranger to nine-figure earners. Actors like Dwayne Johnson and Robert Downey Jr., thanks to their roles in blockbuster franchises, command massive salaries. Additionally, they earn significantly from endorsements, producing roles, and profit participation deals.
Media Stars
Media stars, especially those with a strong presence on digital platforms, can earn nine figures. For instance, YouTubers and influencers with millions of followers can generate substantial income from ad revenue, brand partnerships, and merchandise sales.
Hedge Funds & Investment Bankers
Investment bankers and hedge fund managers are some of the highest earners in the financial sector due to their expertise. Some notable examples include:
Ray Dalio, founder of Bridgewater Associates ($19.1 billion)
David Tepper, hedge fund manager ($18.5 billion)
Carl Icahn, founder of Icahn Enterprises ($10.1 billion)
Pop Superstars
The music industry has always been a lucrative field for successful artists. Pop superstars like Taylor Swift and Beyoncé have made fortunes from their music sales, concert tours, and endorsement deals. These musicians not only create hit songs but also build powerful brands that amplify their earnings.
Entertainment (actors, singers, dancers, etc.)
Performers in the entertainment industry, including actors, singers, and dancers, can achieve nine-figure incomes. Successful film actors can earn millions per movie while top-charting musicians make a significant portion of their income from touring. Broadway performers and dancers in high-demand shows can also command high salaries.
Top-notch Business Owners
Business owners, especially those who own large corporations or successful startups, can earn nine figures. This income comes from their business profits and, in some cases, from selling their businesses. Entrepreneurs like Elon Musk and Jeff Bezos have made billions from their ventures.
These careers represent the pinnacle of earning potential in their respective fields. However, it’s essential to note that reaching this income level requires exceptional talent, hard work, and often a good dose of luck.
Are 9-Figures Rich?
When we talk about money, figures, and digits start dancing in our heads. Six figures? That’s quite impressive. Seven figures? Now you’re playing with the big boys. But when we leap into the world of nine-figure incomes, we’re talking about a whole different ball game. It’s like comparing a kiddie pool to the Pacific Ocean!
A nine-figure income means someone is raking in between $100,000,000 and $999,999,999 annually. That’s right. There are more zeros in that figure than in a beginner’s Sudoku puzzle! This income bracket places individuals among the financial titans of the world. To put it plainly, if you’re earning nine figures, you’re not just rich—you’re Scrooge McDuck swimming in a vault of gold-level wealth.
But let’s be real, nine-figure incomes are as rare as a unicorn at a donkey convention. Even some of the world’s wealthiest individuals, like Bill Gates and Warren Buffet, didn’t make their billion-dollar fortunes overnight. It took years of smart decisions, a bit of luck, and probably a few sleepless nights.
And don’t forget, these ultra-wealthy folks aren’t waiting for a paycheck every month. Their wealth comes from various sources, including investments, real estate, and businesses3. They’ve got their fingers in so many pies; they could open a bakery!
What Does a 9-Figure Lifestyle Entail?
Living a 9-figure lifestyle is beyond the realm of what most people could even imagine. It involves not just extraordinary wealth but also the responsibilities and opportunities that come with it. Here’s a detailed look at what such a lifestyle might entail:
Extreme Luxury
A 9-figure lifestyle allows for some of the most opulent luxuries in the world. For instance, consider real estate: billionaires often own multiple properties around the globe. According to a report by Economics Times, the average billionaire owns 4 homes, with each worth nearly $20 million.
Traveling is another area where this wealth is evident. Private jet travel is commonplace among this group. The cost of owning a private jet can range from $3 million to over $90 million, not including the ongoing costs of maintenance, fuel, and crew salaries.
Philanthropy
Philanthropy is a significant aspect of a 9-figure lifestyle. Many ultra-wealthy individuals are committed to giving back to society. For example, Warren Buffett, one of the richest people in the world, pledged to give away 99% of his wealth to philanthropic causes.
The Giving Pledge is another example of this. Initiated by Bill Gates and Warren Buffet, it’s a commitment by some of the world’s wealthiest individuals and families to give away more than half of their wealth to solve societal problems.
Investments
Individuals with a 9-figure income often have vast and diverse investment portfolios. For instance, Jeff Bezos, the founder of Amazon and one of the wealthiest individuals on the planet, has investments spanning multiple industries. He owns The Washington Post, has a venture capital firm called Bezos Expeditions, and invests in space exploration with his company Blue Origin.
Personal Staff
Having a 9-figure income often means employing an extensive personal staff to handle daily affairs. For example, Oprah Winfrey, a billionaire media mogul, reportedly employs a team of over 3,000 staff, including gardeners, chefs, housekeepers, and security personnel.
This level of staffing isn’t uncommon among the ultra-wealthy. After all, managing a 9-figure lifestyle requires a lot of planning and assistance to make sure everything runs smoothly.
Political Influence
The ultra-wealthy have significant influence in politics due to their large contributions to political campaigns and the influence they can wield over policy decisions. This influence can be used for both good and bad purposes, depending on who is wielding it.
However, the effects of political influence by wealthy individuals shouldn’t be underestimated. It can have a profound impact on policy decisions and shape public opinion in powerful ways. This level of influence is not available to everyone, but those with 9-figure incomes typically use it to their advantage.
Privacy and Security
With great wealth comes the need for privacy and security. People with a 9-figure income often invest in advanced security systems, hire personal security staff, and take measures to maintain their privacy.
This isn’t just to protect their money; it’s also about protecting themselves and their families from potential threats. After all, when you’re one of the wealthiest people in the world, there are bound to be a lot of eyes on you.
High-End Experiences
Those with a 9-figure lifestyle often have access to experiences that are out of reach for most. This can range from private concerts with top musicians to exclusive dining experiences with world-renowned chefs.
This level of wealth also opens up opportunities to travel to the most luxurious places in the world. From private island getaways to luxury cruises, the experiences available to 9-figure earners are limited only by their imagination and budget.
The Bottom Line – Making 9 Figures
Taking all of this into account, it is clear that those with a 9-figure income have access to exclusive and luxurious experiences, as well as the privacy and security often associated with great wealth. This level of influence can also be extremely powerful. Therefore, it should not be underestimated or overlooked.
Overall, 9 figures is an amazing achievement and one that requires hard work and dedication. It is often an indicator of success and can open up a world of new possibilities for those who have achieved it.
Regardless of your current financial status, never forget that anything is possible with determination and perseverance! With the right attitude and mindset, you, too, could one day reach 9 figures or more. Start planning today, and remember to take every opportunity that comes your way. With a bit of luck and the right attitude, success is just around the corner.
FAQs – Making 9 Figures
How many words are nine figures?
Nine figures is a term used to refer to incomes between $100,000,000 and $999,999,999. It does not refer to the number of words.
Does anyone make nine figures?
In the United States, a remarkably small number of individuals achieve the remarkable milestone of earning nine figures or more. According to a report by Market Watch, only 205 people in America earn an astonishing sum of over $50,000,000 in wages alone annually.
To put this into perspective, a nine-figure income would be twice the amount of $100,000,000! As a result, the exclusivity of this income bracket is amplified, leading to a limited number of individuals who can boast such astronomical earnings.
What do “figures” mean in money?
Figures is a term used in accounting and finance to refer to digits of numerical values. It does not refer to physical currency or coins. For example, if you have $50,000, five figures are present (50000). This can also apply to other forms of money, such as stocks, bonds, and investments.
What is a nine-figure job?
A nine-figure job is a term used to refer to the careers of those who have achieved the tremendous milestone of earning nine figures or more annually. This could include professionals from various industries such as tech, investment banking, and sports.
These individuals are typically highly successful in their fields and command higher salaries than other professionals due to their extensive experience and knowledge.
What’s the difference between a 9-figure salary and a 9-figure income?
A 9-figure salary is an annual income of $100,000,000 or more. A 9-figure income is a measure of all sources of income that a person has, including wages, investments, and other revenue streams like royalties. This means that a person can have a nine-figure income without having an extremely high salary.
For example, someone who earns a salary of $1,000,000 but has investments of $100,000,000 would have a 9-figure income. This demonstrates why it is important to consider all sources of income when assessing the overall financial health and status of an individual or family.
What is the difference between 9 figures and 8 figures?
Eight figures refer to financial values between $10,000,000 and $99,999,999. In contrast, 9 figures are incomes of $100,000,000 or more. This is an important distinction to make when discussing the wealth of individuals because it shows how much greater the income of a nine-figure earner is compared to someone with eight figures.
For example, someone who makes $100,000,000 in a year would have twice the earnings of someone who makes $50,000,000. This is why it is important to consider figures when discussing wealth and income, as they can provide valuable insight into the financial status of an individual or family.
Is 9 figures a lot of money?
Yes, 9 figures is a lot of money. It is an astronomical amount that few individuals ever reach. As such, it demonstrates the impressive achievements of those who have managed to achieve nine-figure incomes and provides insight into their level of success and financial status.
As you get older, you always seem to have more things you have to take care of.
Whether it’s the mortgage on your home, the loan on your car or your kids college, these are financial burdens that you do not want to leave behind for your spouse to take care of alone.
I know my wife would find a way to kill me again if something happened to me and I didn’t take care of her and the kids!
Term life insurance is a great and affordable way to protect your loved ones in the event that you would pass away.
Term life is the cheapest types of life insurance policies available, and is only good for a certain “term”, such as 10, 20, or 30 years.
You can read more why I purchased a $2.5 million 30 Term Policy.
If you have taken the first step and started comparing life insurance policies online for you and your spouse, you will notice that life insurance for women is cheaper. “Why is this?” you may ask. Well to understand that question we first have to figure out how life insurance premiums are determined. Here are the 10 Best Life Insurance Companies- According to Good Financial Cents, to find a quote for yourself!
Life Insurance Rates of Males vs. Females
Life insurance is priced by mortality tables. These tables will show the average life expectancy for your gender and age. If you smoke, participate in dangerous activities, or have health problems will also affect you mortality rate.
Now that we know how life insurance premiums are determined, “Why the difference between men and women?” The biggest reason that life insurance cost more for men is that men have a shorter life expectancy compared to women.
In recent studies, they have shown that women outlive men by an average of five years. This is due to a big delay, or advantage that women have over men. Women develop problems with cardiovascular disease, such as heart attack or stroke, later in life than men do. Women tend to develop these problems in their 70s and 80s, where men develop them in their 50s and 60s. This longer life expectancy helps to lower women’s life insurance premiums.
Why Does Life Insurance Cost More For Men?
Over history insurance companies have developed methods that show them if charging men and women the same how will that work with their risk. The tables they use let them know that men should be charged a higher price because of things like life expectancy and how diseases and health issues arise in men faster than in women. If you smoke, participate in dangerous activities, and deal with health issues it could lower the mortality rate. It is known that men live shorter lives than women and this plays a large part in the difference in rates. Recent studies have indicated a longer life for women by about 5 years.
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Deciding on Who Gets the Most Coverage
Deciding how much life insurance you and your spouse need can also be a troubling question. Do I get more life insurance on myself since I make more money? Does my stay at home wife really need life insurance? These can all be answered by looking asking yourself a few questions.
What immediate financial expenses (e.g., debt repayment, funeral expenses) would your family face upon your death?
How much of your salary is devoted to current expenses and future needs?
How long would your dependents need support if you were to die tomorrow?
How much money would you want to leave for special situations upon your death, such as your children’s education, gifts to charity, or an inheritance for your children?
If you are a stay at home mom, do not sell yourself short when deciding on an amount for life insurance. You may think that because your family is not dependent on your income that you don’t need as much or any life insurance. In a recent survey from Salary.com, stay-at-home moms should be charging $115,000 per year for their work. This value was derived from the duties they performed in the household, such as:
Housekeeper
Cook
Laundry Machine Operator
Chief Executive Officer (CEO)
Computer Operator
Janitor
Psychologist
Chauffeur
Facilities Manager
Day Care Teacher
Here are a few examples of life insurance quotes for men and women:
Houston, Texas, one of the major metropolitan areas in the United States, has no shortage of financial advisors. But which ones are worth the money? Sincehiring a financial planner can be a major expense, you want to pick the right match.
Get Matched with 5-Star Rated Financial Advisors in Your Area
I looked for financial advisors who have a solid reputation for putting their clients’ interests first, and who value building a long-term relationship with clients (think from your twenties and thirties until your retirement). Here’s who made the grade.
What’s Ahead:
Overview of the best financial advisors in Houston
Linscomb & Williams
Contact – (713) 840-1000.
Services offered – Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, sstate planning, wealth management, and more.
Asset requirements – Clients need at least $1 million in investable assets. This is a pretty high bar to entry, but the firm claims a diverse group of clients, including individuals without a high net worth.
Typical fees – A fee-only firm, You’ll pay a 1% annual all-inclusive fee for accounts with assets under $2 million. (If you hit $2 million and above, your fee drops to a smaller percentage.)
With over 40 years’ experience, Linscomb & Williams is one of the most well-respected firms in Houston. It has satellite locations in Austin and Fredericksburg, Texas, as well as three offices in Alabama.
Their staff boasts 23 financial advisors, including several who specialize in wealth management.
Like all the firms on this list, Linscomb & Williams is a Registered Investment Advisor (RIA) with the Securities and Exchange Commission.
Asset requirements – There’s no minimum asset requirement, but there is an account minimum of $375,000.
Typical fees – Chilton is a fee-only firm charging an annual 1% of managed assets (for accounts under $4 million) and taking no commissions.
Chilton Capital Management has offered financial literacy, planning, and investment services since 1996. Best of all, clients don’t have to be literal millionaires: Chilton Capital is the rare fee-only firm with no minimum assets required.
Thesmall but very well-credentialed staff includes three CFPs and seven chartered financial analysts (CFAs). Vice President Michael J. Stavar is a certified public accountant (CPA).
Asset requirements – A preferred $1 million account minimum, including assets.
Typical fees – Fee-only firm, $3,500 initial planning fee (waived if you sign on as a client), Fees start at 1.25% for the first $500,000 and drop to 1% for the next $500,000. Hourly rates for consultations ranging from $150-$350 an hour.
Established in 1999, Horizon Advisors works with partner CPA accounting firm Maddox Thomson & Associates to meet all your planning and tax needs.
They’re known for a personal approach with a low 1:54 advisor to client ratio (many advisors at other firms see hundreds of clients).
You’ll work with well-practiced advisors — two of whom, including firm president Larry Maddox, are CFPs. Other Horizon Advisors staff members boast CPA and chartered financial analyst (CFA) credentials.
Tanglewood Total Wealth Management
Contact – (713) 840-8880.
Services offered – Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
Asset requirements – $2 million ($3 million for those who want portfolio management without financial advice).
Typical fees – 0.60% annually for the first $3,000,000 and 0.35% for the next $17,000,000. The minimum annual fee is around $12,000.
Tanglewood Total Wealth Management describes their clientele as the “quietly wealthy.” If you own a business, have an inheritance to manage, have a lucrative career, or are otherwise negotiating “more money, more problems” Tanglewood has you in mind. With a hefty $2 million account minimum, Tanglewood is best for people further along on their journey to building wealth.
The staff includes six CFPs and one CFA. President John Merrill, a veteran CFP, is also known as a leader among Registered Investment Advisors (RIAs).
Asset requirements – Typical client has $1M+, but no hard set minimum.
Typical fees – Fee-only, Minimum annual charge of $5,000 — more than 2.5% of investable assets for clients with balances under $200,000.
The Financial Advisory Group, Inc. has been around since 1997. It’s on the smaller side, which isn’t a bad thing — fewer clients mean advisors can spend more time customizing your plan. Both the chairman and CEO are registered with the National Association of Personal Financial Advisors, as are most of the advisors on staff.
The Financial Advisory Group’s advisor qualifications include four CFPs, two CPAs, one CFP (Certified Financial Planner), and one JD (juris doctor, a law degree). You can expect expertise in accounting and law as well as finance and investment, though the Financial Advisory Group emphasizes it isn’t a formal CPA or legal firm.
Asset requirements – Investors need a minimum of $500,000 to $1 million in assets.
Typical fees – For investment management, you’ll pay 1.25% on the first $2 million in assets, then 1% on the next $3 million. The minimum annual fee is $5,000 regardless of account size.
The Goff Financial Group emphasizes “value investing.” Founded in 1994, they’re fairly new on the scene but they’ve already won a Better Business Bureau award for excellence.
Senior management at Goff includes a Certified Investment Management Analyst (CIMA) and a CFP. Founder Matthew Goff is a NAPFA-registered financial advisor. The firm is also a Registered Investment Advisor (RIA) with a fiduciary responsibility to clients.
Asset requirements – Requires $1 million in assets. Clients using the Pathway program only need $50,000 (not including a company retirement plan if they have one).
Typical fees – Fee-only, Pathway clients pay a modest $79 per month for accounts under $100,000, clients with over $100,000 in assets pay a percentage of their assets: 0.95% up to the first $1 million. Clients with higher starting balances will pay between 0.75% to 1.50% of total assets.
Financial Synergies Wealth Advisors is one company that welcomes younger investors, whether they’re maintaining individual accounts or building wealth for their families. The firm also specializes in working with professionals in the oil and gas industries, both booming in Houston.
It’s been recognized for excellent wealth management by the Financial Times and the Houston Business Journal.
Each financial advisor on staff is a CFP. The firm also has a certified divorce financial analyst (CDFA) and certified fund specialist (CFS) for those who need specialized plans. Individual advisors maintain NAPFA registrations in good standing.
Summary of the best advisors in Houston
Firm
Services offered
Primary clientele
Linscomb & Williams
Investment management, tax savings, retirement preparation, business and solo entrepreneurial consulting, estate planning, wealth management, and more.
Young people just starting their high-earning careers and those with modest assets.
Those looking to start their financial journey on strong footing, young people without a lot of assets.
Horizon Advisors
Financial planning, tax planning, specializes in unusual tax situations.
Those searching for a more personal experience and people with reasonable assets.
Tanglewood Total Wealth Management
Wealth management plan, which covers everything from the basics — retirement, asset protection, taxes, college funds if you need them — to small business financing and long-term disability risk management.
High-earners searching for help with all aspects of their finances.
Young professionals who don’t have a lot of assets, but want to learn how to grow them.
How I came up with this list
Out of hundreds of financial advisory firms in Houston, these firms stood out because of their solid reputations and reviews. They also hit a few key benchmarks you should look for in any advisor.
They’re Registered Investment Advisors (RIAs)
At a minimum, I wanted to pick firms that are Registered Investment Advisors (RIAs) with professionals who are Investment Advisor Representatives (IARs). All RIA firms are financial fiduciaries, which means their advisors are legally obligated to act in your best interest rather than their own.
They’re fee-only
Fee-only advisors earn nothing but the money clients pay them. These costs might be an hourly rate, a flat fee, or a percentage (usually between 1% and 2%) of your managed assets. They don’t get commissions or financial incentives for recommending certain investment products.
This is the kind of advisor you want — since they don’t have conflicts of interest, their only motivation is to make the best decisions for you. A firm that also operates as an attorney or insurance broker, or earns commissions by selling products and services, might steer clients towards choices that would increase the firm’s profits.
Their advisors have top credentials
The most common individual credential isCertified Financial Planner (CFP) which requires specific economic education, three years’ experience, and continuing education every two years as the industry changes. AChartered Financial Analyst (CFA), another common designation, needs four years’ experience making investment decisions.
A NAPFA membership is also a good sign since NAPFA has strict ongoing regulations and all their advisors are fee-only.
They’re trusted by industry insiders
The financial advisory industry is heavily regulated; clients trust advisors to handle their life savings, so they need the most qualified people on the job.
Aside from reading objective reviews, I looked up each firm and its principal staff members on a few watchdog sites: theInvestment Advisor Public Disclosure database run by the SEC, and the independent search engineinvestor.com. Both sites screen for possible conflicts of interest and track whether an advisor has any disclosures, or complaints, on their record.
What questions should you ask a financial advisor?
Who are your typical clients?
You want a skilled advisor, and just as importantly, you want a good match. I wanted to find firms that will work with young professionals despite the high financial bar to entry. If a firm’s clientele is mostly mid-career executives and people ready for retirement, they may not be the best fit for a recent college grad starting to save for retirement.
How do you usually communicate with clients, and how often?
Maybe you’re content with quarterly reports on your investments and annual check-ins. Or maybe you want an advisor available by email or phone whenever you have a question. Get a sense of how regularly your planner will be available outside of any scheduled chats.
What’s your investment philosophy? What asset allocation do you use?
A good advisor will have a clear answer, including their plan to diversify your portfolio and increase returns.
How are you compensated? Do you collect any commissions for investment products?
Your advisor should be compensated with fees only, not commissions. Otherwise, they may guide you towards investment choices that will earn them money or boost their sales.
Who has custody of my assets?
Reputable financial advisors don’t actually have contact with your assets. Instead, they’ll trust client assets to a “custodian”—a larger brokerage, often a big name like Charles Schwab or Fidelity.
What are the costs of hiring a financial advisor?
Almost all advisors offer an initial free consultation (in-person or via phone) where you’ll discuss what you’re looking for.
If you decide to work together, your annual fee will most likely be a percentage of your assets under the firm’s management. A charge between 1% and 2% of total assets is the industry standard. For instance, if your advisor charges a 1% fee and you entrust $500,000 in assets to the firm, your fee is $5000 a year or around $417 a month. As your assets climb higher, you’ll pay a smaller percentage.
Some firms charge an hourly rate instead of an asset-based rate for working with advisors, usually between $200 and $500 an hour.
Summary
Whether you’re exploring the idea of hiring a financial planner in Houston or you’re ready to commit, use this list as a jumping-off point. Non-Texas residents should give these firms a look too, since many are licensed or have offices in other states.
Are you stuck in a rut feeling like nothing is exciting left to do? Think again! If you were lucky enough to inherit $100,000 suddenly, what would be the first thing on your bucket list? Redditors had plenty of ideas for how they’d spend their newfound fortune. From purchasing exotic vacations, high-end home renovations, virtual reality headsets, and dream weddings to community sculpture gardens to more practical investments in college tuition grants—there are plenty of ways to imagine how you’d spend a large inheritance!
1. Attend the Funeral
One user pointed out, “Attend funerals.”
Another user replied, “It took me a second, but yep.”
One commenter responded, “Goes without saying.”
“First, I would attend the funerals of the deceased. Then I would think about what to do with the money. Just a matter of respect,” another Redditor shared.
2. Pay Off Debt
“Become debt free!” exclaimed one user.
Another user added, “Become debt free, stash the rest in savings and CDs for sure. I’ll even get adventurous and go out and have a nice dinner.”
One commenter shared, “You know you’re an elderly millennial when you see the term CDs and start thinking about replacing your beloved but heavily scratched pop-punk and hardcore punk collection from the early and mid-2000s.”
3. Pay Bills
One user posted, “Pay bills.”
Another user confirmed, “100% this. Pay bills. Pay off debt. Bank the rest against a rainy day.”
One replied, “Smart.”
4. Plan Ahead
One user shared his own story, “I inherited a little more, roughly $150k total, than that after my mom passed away a few years ago. My dad [had been] a doctor, and she didn’t have to worry about money for her remaining 21 years. When they sold their rental duplex (they never raised the rent in the 30 years they had it), I used my share to open an investment account for both of my kids and used the rest to pay off one credit card.
“With the cash I received from the trust, I paid off the other cards and started my own investment account. I’m 50, and for the first time in my adult life, I don’t have debt other than a student loan (that will hopefully get discharged under the borrower’s defense for false advertising) and our house.
“Before doing that, though, I booked a family vacation to Riviera Maya. I mentioned Dad was a doctor; well, he and Mom traveled the world going to dads medical conferences and just seeing the world. They lived to see new places and do new things. So, to honor and thank them, I spent a small amount and took the family on our first trip outside the US. I cried on the plane, I cried on the beach, I cried when I saw apple pie at the resort like mom made, and I cried when we came home. At one dinner, we talked about Grandma and what we miss most about her. Dad passed before I met my future bride, so only I mentioned him.
“So if I inherited that again, I’d probably do the same thing again. I remembered where it came from, and I prepared for those it would eventually go to.”
One user replied, “This is beautiful, thank you for sharing your incredible story with me.”
“For a person who is not from the US, it’s mind-blowing that you are 50 years old (not that far away from retirement age), and you still have student loans,” one user commented.
5. Make Sure it’s Not a Scam
Another user posted, “You know how generational wealth is kind of a thing—well, so is generational poverty, as it turns out. So if I suddenly inherited 100k, the first thing I would do is make sure this wasn’t a prank or a scam.”
One confirmed, “Yes, fortunately, it’s not a scam, as my aunt passed away.”
Another user added, “I missed that part. Condolences and congratulations in whichever order you feel is more appropriate. Take the sincere advice of a generational poor person for what it is—but if I were in your shoes, I would act conservatively. I imagine there are a lot of people with a lot of enticing pitches for the newly rich. Just keep pulling in a regular paycheck for your day-to-day if you can, and make sure you have found a well-regarded accountant before the next tax season. Start inquiring into a money manager that can provide a realistic plan to ensure your long-term retirement.
“(Edit: Also, think of ONE affordable extravagance you could never financially justify before but might have been able to pull off and give to yourself as a gift. For me, that would be a 3-day weekend in some major city.)”
“Sending condolences, I was put in a similar situation when my dad passed away. The best advice I can give is to not rush into any decisions financially, take your time, and the money isn’t going anywhere!” shared one user.
6. Fully Exhale
“For the first time in my adult life, I could fully exhale,” one user confirmed.
One user pointed, “THIS.”
Another user commented, “YES.”
One Redditor added, “Hell yeah, just to breathe easy is a luxury.”
7. Add It to the Rest
One user shared, “Throw it on the pile.”
One user added, “New paint job for the jet.”
“Ya know, my old boss traded in his propeller plane for a jet and got $100,000 in tax write-offs…” a user commented.
One user commented, “I get it… sometimes it’s just super exhausting just thinking of all the money I have.”
8. Invest
“Invest,” one user shared.
Another user replied, “All in SPY 0DTE 0.5% OTM calls.”
One user commented, “Invest half, and with the other half, live pretty much the same life, stay at my job, etc., but with complete financial security.”
Another user said, “Invest, invest, invest.”
The OP asked, “What would you invest in?”
The user answered, “The reality is 100k is just the starting point to getting anywhere financially. If you did inherit 100k like you say you did in another comment, it’s worth knowing that if you’re still young (30 or under), you have a huge head start in a secure financial future. I’ll get crap for this, but only spend up to 15% or so of the actual money you get from this. For the rest of it, you should first look to invest in a tax-advantaged account like a Roth IRA. If you max out that annual limit ($6500 for 2023), then either open up high-yield savings (if you’re in a place to buy a house soon) or put it in something simple like the S&P 500 index fund (if you can put this money away for a long time you’ll be shocked at how much it’s grown in 20 years). But most importantly, if you have any high-interest debt, pay that off first.”
9. Buy Lottery Tickets
One user shared, “50,000 lottery tickets.”
The OP commented, “Love this, thanks for a laugh.”
Another user shared, “Laugh?”
One user commented, “And then you get $70k back if the MrBeast videos are any indication.”
10. Pay Off Mortgage
A user shared, “Pay off my mortgage and other debts, then go back to living as normal, just with more disposable income since I won’t be making repayments anymore. It’s such a boring adult answer, but it’s accurate.”
Another user replied, ‘I agree with it; I would do the same.”
11. Save As a Safety Net
One user shared, “Wife and I inherited around $175k. What we did was largely just keep living life, exhale finally, and catch up on some… debts we had. Used the money as a safety net to get out of construction and into something else, and now our lives are, without a shred of doubt, 100x easier than they were before.”
The OP of the thread replied, “This is my hope.”
12. Ask a Financial Advisor
One user posted, “I’m 50F on a disability pension with high rent and living costs. It’s an unexpected windfall, and I am not financially literate. I don’t want to blow it. Yes, I am going to get a financial advisor!”
One user commented, “Go to a personal finance Reddit or something and ask how to choose a good advisor. Some are shady!”
“It’s honestly not that much these days, a down payment on a house at most. Pay off any debt, but otherwise, live as you have been. Hopefully, with a safety net for the next financial speedbump,” replied one user.
13. Trucks and Good Times
One user freely posted, “Trucks and H–kers. It would be best if I didn’t get 100k.”
Another user replied, “That’s like 1 of each, lol”
One replied, “Each? You must have gotten a cheap truck.”
14. Government Bonds
One user commented, “After potentially paying estate/ inheritance tax, Spend [40k] on settling debts (I don’t have much, so there’s going to be leftovers, but I will put them in government bonds as savings $. Spend [10k] on online courses and career certifications. Spend [10k] on buying stuff I’ve wanted for a while. Spend [10k] on new tech. Spend [5k] on a mini solo budget vacation to somewhere random. Keep [5k] as pocket cash. Save [20k] in a high-interest account or maybe split into government bonds, high-interest accounts, green tech stock options, etc. ( I am hesitant investing real estate because of the obvious market bubble).”
“Love this detail; much appreciated. No tax and I’m debt free. I’ll be making a list off this,” replied one user.
15. Donate
“Help out a lot of people,” one user shared.
Another user replied, “Yes. I’ve already decided who I’m going to help and how much. Giving back is important. I couldn’t imagine not sharing my blessing with those closest to me. I also need help as I have been living on the disability pension, so I’d also like to be out of poverty if at all possible, lol.”
Do you agree with the things listed above? Comment below!
Source: Reddit.
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