You’re finally making good money. Now what?
Sometimes, hard work pays off. You’ve weathered the storms and taken wise chances, and now (finally), you’re making good money.
If you’re wondering what to do now, you’re not alone – one study showed that the number of households with a net worth of $1 million grew from 2.4 million households in 1983 to 9.1 million households in 2016 – a growth rate of 279 percent.
You may or may not be at the millionaire threshold, but many who have reached a level of financial comfort figure complex philosophies should accompany their increased wealth. You may be relieved to find that some of the best advice is simple.
- Be a (Parkinson’s) law breaker.
Many experts believe that you can finally replace the fifteen-year-old car you’ve been longing to change – but instead of considering the Alfa Romeo, consider how you’d break Parkinson’s law.
Extreme responses, like “stop investing entirely,” “no longer watch what you eat,” or “spend your savings,” all ring untrue – because they are. Instead, consider “allowances” and “rewards.”
For example, you may now allow yourself a pair of jeans with a hefty price tag or a trip to a place you’ve always wanted to visit – because you’ve researched, shopped, and are buying them at a value price.
And now, you may be able to reward yourself when you hit other future goals, like staying within your budget every month, or maxing out your IRA for the year.
Remember – there is a difference between paying yourself first and rewarding yourself first. Paying yourself first refers to the practice of funding your own savings and investment accounts first, before you do anything else. It’s a practice you don’t need to give up – in fact, some experts believe you can now expand your “pay yourself first” goals.
You’ll find there are plenty of tools available to allow you to defer the payment of taxes. Make sure you can work with an advisor you can trust to work through this critical part of your financial planning.
You may have been focused on a savings or income goal, but now is a good time to know and understand your entire financial picture.
In all, it’s a good moment to stop – take a breath, recalibrate, take a look ahead and in the mirror, and enjoy this moment of success. As you move forward, you’ll be grateful to have a better understanding of where you are, where you’ve going, even as you look with pride on where you’ve been.
