Latest news with #wealthbuilding
CBS News
a day ago
- Business
- CBS News
First-time homebuyers are an endangered species in the U.S.
What to know about home prices if you're looking to buy or sell What to know about the housing market What to know about the housing market The dream of homeownership is fading for millions of Americans. Figures from the National Association of Realtors (NAR) show that only 24% of housing sales last year were by first-time homebuyers — that's down from 50% in 2010. The typical purchaser is also older than in the past, with an average age of 38, or about 10 years above historical norms. Such trends reflect the challenges of climbing on the property ladder as home prices hover near record highs, inventory remains low and with mortgage rates at their highest level in years. "There are fewer first-time homebuyers and they are older than we've ever seen, both because of headwinds inside and outside of the housing market," NAR deputy chief economist Jessica Lautz told CBS MoneyWatch. Opportunity missed Americans who are shut out from buying their first homes miss out on an opportunity to build wealth through homeownership, Lautz said. "It's their biggest asset, and with the delay into homeownership first-time homebuyers are losing about 10 years of housing wealth. And that's for those who can enter into the market," she said. "For those who can't, they lose out on housing wealth by not having that as the biggest asset in their nest egg." Only about 1 in 5 listed homes in March were affordable for households with $75,000 in annual income, according to a NAR analysis of property listings. Today, a household with annual income of $50,000 can only afford 8.7% of listings, down from 9.4% a year ago, according to the data. "The lack of homes, especially at affordable price points where they would be entering the market, has been plaguing first-time homebuyers for the last several years," Lautz said. "It's been a continual issue, especially with interest rates. It makes the cost of homeownership quite high." Along with inadequate construction of affordable housing, many existing homeowners are reluctant to sell their properties given their lower mortgage rates. "People who are homeowners have no motivational factors to move, so that's not freeing up inventory," Lautz said. "It's almost created a hoarding situation for those in low-interest rate mortgages who don't want to separate from them." Financial squeeze Other factors are making it hard for people to buy a first home. The high cost of rent gets in the way of saving for a down payment, while credit card debt, car loans and child care costs also hold first-time homebuyers back. More recently, meanwhile, the resumption of student loan payments is putting many people under financial pressure. Some Americans are managing to save enough for a first home by temporarily moving in with family or friends to minimize the cost of rent, Lautz said. But that approach isn't viable for everyone. "It has been a pathway to ownership for some. But for someone who is 38-years-old, moving in with mom and dad can get uncomfortable," she said. "For an older homebuyer, that might be less attractive for everyone involved."
Entrepreneur
a day ago
- Business
- Entrepreneur
Why Every Small Business Owner Should Consider Real Estate — Even Without Deep Pockets
Investing in real estate is definitely not just for tycoons. Learn more about where to begin and how to detect opportunities to set you up for future success. Opinions expressed by Entrepreneur contributors are their own. Small business owners often invest every ounce of time, money, and energy into making their ventures thrive. But relying on a single income stream — especially one tied to a volatile market or a narrow customer base —can leave you exposed to risks you won't see coming until it's too late. That's where real estate comes in. As a tangible, income-generating asset, real estate offers something many business models don't: stability. It can provide passive income, hedge against market uncertainty and become a foundation for longterm wealth. You don't need to be a millionaire or a seasoned investor to get started — just the right strategy and mindset. Related: Why Real Estate Should Be a Key Part of Your Wealth-Building Strategy in 2025 and Beyond Why real estate matters for entrepreneurs It's easy to funnel every dollar back into your business. Growth takes capital, and reinvestment is smart. But it's also risky to be entirely dependent on one stream of income. Real estate offers a practical hedge. Done right, it: Builds equity over time through appreciation Provides recurring rental income Offers tax advantages, like depreciation and deductions Creates financial security separate from your business's day-to-day performance Set aside a percentage of your profits for real estate. Think of it as your "emergency growth fund" — an asset that grows independently and cushions your business during slow seasons or unexpected downturns. Entry points that fit your budget If you're working with limited capital, buying property might feel out of reach. But there are more options than you think: Vacant Land with growth potential: Affordable and low-maintenance land on the outskirts of growing cities can offer major long-term upside. This was my personal starting point—and it's one I recommend for first-time investors looking for low overhead and long horizons. Affordable and low-maintenance land on the outskirts of growing cities can offer major long-term upside. This was my personal starting point—and it's one I recommend for first-time investors looking for low overhead and long horizons. Multi-family residential properties : Duplexes or triplexes allow you to live in one unit while renting out the others to offset your mortgage. It's a smart way to ease into real estate while staying cash-flow positive. : Duplexes or triplexes allow you to live in one unit while renting out the others to offset your mortgage. It's a smart way to ease into real estate while staying cash-flow positive. Commercial real estate partnerships : Can't afford to go it alone? Team up with other entrepreneurs to co-invest in a property. Shared cost, shared return — and less pressure on any one individual. : Can't afford to go it alone? Team up with other entrepreneurs to co-invest in a property. Shared cost, shared return — and less pressure on any one individual. REITs and real estate crowdfunding platforms: Invest in real estate without owning property directly. These platforms let you put smaller sums into larger projects, spreading your risk while still gaining exposure to the market. Before making any move, assess your risk tolerance. Ask yourself: How stable is my business income? Can I cover a few months of vacancies? Am I financially prepared for interest rate fluctuations? Once you have those answers, you'll have a much clearer sense of what kind of investment fits your current life and business stage. A personal example: Starting small, thinking longterm When I first stepped into real estate, I was juggling my architectural work and building my platform. I didn't have the capital for a high-stakes deal, but I found an underpriced parcel of land just outside a city that was rapidly expanding. I took a calculated risk. I stayed patient. Five years later, that once-ignored lot appreciated steadily as development reached it. It wasn't flashy, but it became a meaningful source of passive income and financial resilience during turbulent business phases. Don't try to hit a home run. Look for the singles. A modest, well-timed investment can grow slowly in the background while you focus on your main business. Real estate can strengthen your core business Once you've got a foothold in real estate, you can get creative with how that property serves your business. Use it as loan collateral: Lenders often offer better terms when you have hard assets. Real estate can strengthen your position when seeking capital for business expansion. Lenders often offer better terms when you have hard assets. Real estate can strengthen your position when seeking capital for business expansion. Create flexible business space : Depending on zoning, your property could double as a pop-up shop, event venue, or even an office space — saving you money and giving you flexibility. : Depending on zoning, your property could double as a pop-up shop, event venue, or even an office space — saving you money and giving you flexibility. Generate additional income: Sublease space to freelancers, startups, or small business owners. Build community while offsetting expenses. Check local zoning rules and consult a professional before repurposing property. Done right, real estate can be more than a passive asset — it can be a strategic business tool. Related: How to Make Money in Real Estate: 8 Proven Ways You don't need millions to build wealth through real estate Real estate isn't reserved for the ultra-wealthy or the full-time investor. As a small business owner, you have the hustle, the instinct, and the resourcefulness to make it work for you. Start small. Be strategic. Choose locations with growth potential. Prioritize patience over hype. In time, you'll not only diversify your income — you'll build a financial safety net that makes your business (and life) more resilient.
Forbes
a day ago
- Business
- Forbes
12 Reasons You Will Never Be A Multi-Millionaire
If becoming a multi-millionaire were easy, everyone would be doing it. There are over 22 million millionaires in the US, and likely many more on the path to reaching this level of wealth. The numbers get smaller as you move up the net worth scale. I want to share with you 12 hurdles you will need to overcome if you wish to become a multi-millionaire yourself. I recently helped a couple reach their financial freedom, a number of $10 million of liquid net worth that they could use to fund their lifestyle if they quit working. They are celebrating by taking a group of their closest friends on a once-in-a-lifetime trip. How amazing is that? While this number may be beyond what you need to retire comfortably, many of you may not feel you are living lavishly with the income provided by just a million dollars of net worth. Especially if most of your net worth is tied up in non-income-producing assets like your primary residence. This is why many of you reading this will likely want to plan to become multi-millionaires. Are you taking the simple but necessary steps to grow your wealth and reach financial freedom? Alternatively, are you mortgaging your financial future by making these 12 common financial mistakes that will keep you from ever building a significant net worth? Over the past 20+ years, I have been helping people bootstrap their way to building life-changing wealth. I've also seen people take mind-blowing income, seemingly make it disappear into thin air and end up in financial ruin. Either way, given enough time and perseverance, anyone can achieve the American Dream and become a multi-millionaire. Do I think this will be harder today than it has been in the past? Perhaps, but hey, play the hand you've been dealt and make the most of the opportunities you have available to you. Here, we will cover some of the most common issues that can prevent you from joining the millions of Americans who have already become members of the not-so-exclusive Multi-Millionaire Club. I could argue that it has never been harder to invest well, given the constant news at our fingertips and the ability to trade on our iPhones 24 hours a day. You could also say it has never been easier just to set it and forget it with a well-diversified portfolio of a few amazing index funds. You will just get average market returns, but here's the news: these returns are typically way better than what most people achieve by stressing themselves out by buying and selling individual investments over time. It will be nearly impossible for the typical worker to become a self-made multi-millionaire without at least doing some type of investing. Yes, you could try and wait for a big inheritance or marry into money and strike it rich. There aren't enough wealthy parents or single people for all of us to follow these routes to becoming multi-millionaires. Therefore, it is likely that you will need to invest. You may find comfort in the illusion of security that comes with hiding your life savings under the mattress. Still, you are losing money every day as inflation erodes your purchasing power. If you want to achieve and maintain financial freedom, you will need the help of compounding interest via some type of investing. There are risks associated with investing in anything from stocks to bonds, ETFs, mutual funds, and even when buying real estate. However, the risks of not investing are even greater to your long-term financial security. By not taking any investment risk, you are essentially guaranteeing what you are most afraid of: running out of money in retirement. (Example) How to Accumulate $2 Million: This is a simple example of the magic of compounding interest. The same result, but you can get away with saving a whopping 95% less! Putting this another way, if you saved $2,708 per month from 22 to 70 and earned 10% interest, you would have accumulated over $38 million. Think of how fabulous your lifestyle could be with a passive income stream generated from $38 million. Assuming you've overcome your irrational fear of investing and have crafted the perfect investment plan (or had the help of a fiduciary financial planner to create the best investment plan for your financial needs) if you don't contribute enough along the way, you will never become a multi-millionaire. After all, it is not what you make but what you keep. I know plenty of high-income folks without a pot to piss in – I do have the pleasure of living in West Hollywood, within walking distance of Beverly Hills, where some tend to care more about spending their money on flashy cars and designer clothes and jewelry than actually saving and investing it. On the other hand, I appreciate the stories of ordinary workers with average incomes who have amassed staggering amounts of wealth over their lifetimes. Do yourself a favor and stop procrastinating; there will never be a better day to begin saving than today. With enough time, it doesn't take a huge amount each month to become a multi-millionaire. Above, we mentioned $141 per month to become a multi-millionaire, which is like a few smoothies at Erewhon and less than a monthly gym membership at Equinox. Even if you can only save a tiny amount, you will be better off than if you never started at all. I bet you will be surprised by how you don't even miss the money you are saving. That tiny savings rate can grow over time into something substantial. Amenities that were once a luxury are now considered necessities. Not to mention, the cost of living has skyrocketed over the past few years, driving up the cost of everything. The Trump tariffs, if fully enacted, could drive up the cost an additional 10-150%+ on almost everything you buy. It is easy to see how so many people struggle to save a bunch of money each month. Many people try to finance their American dreams. Their budgets are pushed to the breaking point. Some live paycheck to paycheck, while others fall into the costly trap of credit card debt. The best-case scenario here is that you are not accumulating any wealth. The worst case is that you are setting yourself up for bankruptcy or having to work forever. Constantly drowning under an insurmountable pile of consumer debt is stressful and costly. Pay yourself first and make living within your means and getting on track for financial freedom a priority. This mistake also goes hand in hand with living beyond your means. So many people are drowning in debt. It blows my mind. One person I met had $51,000 in credit card debt. This translated into over $10,000 in interest per year just to stay even. (What would you do with an extra $10,000 per year?) I met them after they had taken some drastic steps to get their debt under control and finally paid off. It wasn't easy, but it was necessary. Good debt, such as a mortgage, business loan, or, arguably, student loans, can help you build wealth over time. Consumer debt (credit cards) – will likely be a major hurdle to achieving financial freedom. You are busy, life is stressful and you probably don't want to think about getting the best deal on every purchase. I get it. But $20 here and $150 there can really add up, especially when they happen on a regular basis. Recently, I was booking a flight, and for some reason, a premium economy seat was more expensive than one in business class. So, I saved money by buying a better class of service. Sometimes, saving money can be fabulous. Other times, it is just buying your toilet paper at Costco, where it is half the price of the grocery store. It may just seem like a few dollars each time you throw money down the drain. But if you invested those few dollars over time, it could mean the difference between running out of money in retirement or maintaining financial freedom as you age. Unhealthy choices can lead to a cascade of painful expenses and, ultimately, even more pain. Someone I know put off getting treatment for a minor knee injury, initially saving some money in medical bills. The minor injury eventually developed into a more serious issue, ultimately requiring surgery. Even with excellent health insurance, the out-of-pocket costs were substantial for surgery and post-op physical therapy. However, the cost of missed work, bonuses and career progression were even more significant than the medical bills. Not surprisingly, 98% of millionaires consider their health to be their most important personal asset, according to a recent study by US Trust. Without your health, no amount of money can buy back your quality of life. Yes, plastic surgery may be able to make you look healthier, but it doesn't actually improve your overall health. As a financial planner and health enthusiast, I encourage you to take the time and invest in the necessary screenings and physical exams to maintain optimal health. Look to exercise (more) and increase the health value of the food you consume. I am aware that real food (even better if it is organic) will cost more than highly processed food, but this is the one area I almost always advocate for people to spend more. As the owner of a wealth management firm, I think my being healthy (and feeling good) should translate into a more profitable business. We don't make money when we are sick at home. Do you cringe every time you hear the word budget? I understand; I do, too, which is why I try to operate within a spending plan. When people are good with money, they are not just treating their spending choices as a random event. The money will not just take care of itself. Yet, many people are surprised when that monthly bill pops up (yet again, every month) on their credit card or bank statement. Simply put, a spending plan is about managing your financial expectations to avoid unwelcome surprises so you will still have money left over for the better things in life. Think fabulous vacations, clothes, regular massages or even money for a babysitter. It's not what you make but what you keep. Many people love to get big tax refunds; it feels like found money, right? No! The reality is that if you get a big tax refund, you have just given the government an interest-free loan. All this while you are suffering the consequences of paying sky-high credit card interest for the privilege. Proactive tax planning is a major part of becoming a multi-millionaire. The more money you have will often lead to more taxes each year. The dividends from a $10,000 account may not really change your taxes much. Once your account reaches million-dollar balances, the annual taxes can be painful, especially if you aren't invested in tax-efficient investments or portfolios. Many people only think about taxes when they file their annual tax returns. In many cases, this can lead to missing out on valuable tax-planning opportunities and result in overpaying your taxes each year. This will slow down your progress to becoming a multi-millionaire. Vanguard estimates that working with an average financial advisor can add 3-4% to your investment return each year over time. Think of how much value you could potentially receive if you were working with a fabulous fiduciary financial planner. To put this in perspective, if you saved $1,000 per month and earned 6% interest from age 22 to 70, you would accumulate around $3.3 million. That is pretty nice, but if a financial advisor were able to help you bump that up to 10% per year, you would end up with over $14.1 million. You would save the same amount, but you could possibly end up with more than four times the net worth. That is pretty fabulous if you ask me. If you hate your job or career, it will show. This can result in slower career advancement over time. While it may be easier said than done, choosing the right career path that offers the potential to earn enough to support your desired lifestyle and is something you genuinely enjoy is a major life quest for many. You may need to balance taking a job you like (versus one you love) to earn the money you need to bring more happiness to other parts of your life. Obviously, some careers have more income potential than others. More income does make it easier to build more wealth over time. First off, divorce is expensive. If you save up and become a multi-millionaire, then you have to split everything in divorce; well, that doesn't sound like fun. Likewise, choosing the wrong spouse will make your quest to become a multi-millionaire much more difficult. If one spouse is a spender and the other is a saver, the spender tends to win. When considering a life partner, don't forget to consider how you each think about money. Those who have a purpose or passion in life make it easier for themselves to get up every morning. Over the years, I've observed that many of my happiest and most successful wealth management clients actually love what they do. They move through life with an extra spring in their steps. Some reached financial freedom long ago and continue to work. Others pivoted to a second career that brought them more joy. It may be tempting to choose a job or career path primarily based on the salary. Also, consider the quality of life that it will ultimately provide for you and your loved ones. Follow your passions and dreams, and money will follow, as the saying goes. At the risk of coming across as overly optimistic, I've seen real-life examples of this over and over again in my career, helping people improve their lives through financial guidance. You don't have to do this financial stuff alone. Work with a fun, fiduciary financial planner to get your financial house in order, and you, too, could achieve wealth beyond your wildest dreams. In case you were wondering, there are around 4.8 million people with a net worth of $5 million or more. Perhaps one day you can be one of them.
The Independent
a day ago
- Business
- The Independent
How much do I need to save to build a £100,000 ISA pot?
Whether you are saving for retirement, looking at long-term wealth building or have a specific goal in mind for the future, Individual Savings Accounts (Isas) can be a great tool to help you achieve it. Gains made from money in them - interest earned, dividends or capital gains - are tax free and under current regulations, each person can save up to £20,000 in them every single tax year. What's more, the earlier you start, the greater your chances of hitting your long-term targets, as time can be the great multiplier when it comes to your money thanks to the effect of compounding. Therefore, even if you don't get anywhere near using up your £20,000 allowance, you can still set yourself lofty targets over time - such as a milestone figure of reaching £100,000. There are other types of Isa available, but here we'll look at cash and investing Isas. Cash ISA The most-used Isa type is the cash Isa. Right now with the interest rate on cash Isas somewhere around a competitive 4.5 per cent mark, you can not only earn a reasonable amount on your money, but you can also protect it from inflation, which is running at 3.5 per cent and not projected to drop below 3 per cent until next year at least. However, interest rates fluctuate a lot over time, meaning you may need to regularly check you are earning the best amount on your money. How long it takes to reach £100,000 depends on multiple factors, such as your initial deposit amount, ongoing contributions and your interest rate. Example 1: £2,000 lump sum to start and £250 saved per month, at an average of 3.5% interest. In this scenario, you would cross the £100,000 mark during your 22nd year of saving regularly. At that point you'd have saved £68,000 of your own money, earning an additional £35,000 in compounded interest. Example 2: No initial deposit but £400 a month saved at average 3.5% interest. Some people may have no lump sum to get started with, but have perhaps taken a new job or a pay rise - so bigger monthly savings are possible. In this scenario, year 16 would be the milestone - with more than £25,000 of the total £102,000 in the pot being interest earned, showing the importance of consistency. Investing ISA While the above examples use a flat 3.5 per cent interest rate for cash, there's no way of knowing what the rate will be a year or a decade from now - it could be far higher or lower, as could inflation. There may be a better way of reaching your target figure than purely cash, however: a stocks and shares Isa, sometimes called an investing Isa. Here, your money can be put into the stock market in search of better returns - over longer periods of time, investing has historically always outperformed cash. If it's not your area of expertise, there are plenty of automated options where you can simply select your risk tolerance or other preferences and let your money be allocated for you accordingly. In investing, there is no certainty though - cash savings remain as cash savings and are easily predictable. A typical World Index Fund has returned between 10 and 11 per cent annually over the last decade, while the FTSE 100 (the UK's biggest 100 listed companies) generated a 6.3 per cent annualised return over the 20 years from 2003 to 2023, including dividends. Neither are guarantees of the future, but many experts suggest over the long term, an annual return of 6-8 per cent is possible for investors - which over many years can have a significant difference when compared to cash saving rates. Example 1: £2,000 lump sum to start and £250 invested per month, with an annual 6.5 per cent return. After 18 years of investing at this rate you'd hit the £100,000 mark - and your own money would only make up half of this total. £56,000 would have been saved through your deposits, with just over £50,000 gains giving a total of £106,866. By year 20, your total gains would outstrip your own deposits and you'd have £127,000 all told. Example 2: No initial deposit but £400 a month invested, with an annual 6.5 per cent return. More money going in each month means the initial pot builds quicker, so £100,000 is reached by year 14. However, as that money has had less time to grow and compound, £67,200 is of your deposits compared to just under £41,000 in earnings. The tipping point for bigger gains comes in year 20 - by which time the total pot would be £192,000. The lesson remains: starting sooner rather than later is key, as time plays the biggest role in compounding money, even if you start with small amounts.
Yahoo
2 days ago
- Business
- Yahoo
I've been a financial planner for over 10 years. Here are the 6 most useful lessons I've learned from my wealthiest clients.
The author has over 10 years of experience as a certified public accountant and financial planner. Most of his wealthy clients have common habits, mindsets, and wealth-building strategies. He's learned six useful financial lessons, which include generosity, health, and relying on others. I'm a certified public accountant and certified financial planner with over a decade of experience helping high-income professionals and diverse business owners take control of their finances. My clients range from medical professionals to small businesses, and I help them grow their wealth, reduce tax burdens, and run more profitable businesses. Many of my high-net-worth clients share common habits, mindsets, and strategies that helped them build and maintain their wealth. The good news is that anyone can apply these habits to improve their financial life. Here are six of the most useful lessons I've learned from my wealthiest clients. One of the most profound lessons I've learned is that life becomes richer when you focus on pouring into others, rather than just focusing on yourself. For example, clients who are generous with their employees often see retention rates soar. This principle extends beyond finances into mental well-being, relationships, and overall happiness. Generosity has a way of opening doors that talent or hard work alone sometimes can't. Many of my wealthiest clients often share that they wouldn't be where they are without the generosity of others who helped them along the way. Wealthy individuals often have incredibly demanding schedules, leaving little time for personal tasks or downtime. One key to their success is recognizing the power of outsourcing and delegation. Whether they hire a nanny to help with childcare or work with a financial advisor to manage their finances, they understand that they can't do it all alone. Instead of trying to juggle every responsibility, they build a trusted team around them with professionals who help them stay focused on what matters most. They become comfortable relying on others, knowing it's the only way to accomplish everything on their plate while still maintaining their sanity and quality of life. If you don't take care of your health, it will be harder to reach your goals, no matter how important they are. Many of my wealthiest clients have learned this firsthand. They've realized that when their mental, physical, spiritual, or emotional health is off-balance, their ability to lead, create, and perform suffers. As a result, they intentionally make time and invest in activities that support their overall health, such as exercise, therapy, spiritual practices, or rest. Prioritizing health is not a luxury; it's a necessity. One of the most consistent pieces of wisdom I hear from my wealthy clients is this: never stop learning. No matter their industry or background, they all attribute part of their success to a mindset of continuous growth. They understand that lifelong learning is essential to keep progressing in both life and business. There's no single path to learning. Some lean on books and mentors, while others invest in masterminds, coaching, or formal courses. What matters is the commitment to growth. One of the biggest challenges my wealthy clients face is resisting the urge to significantly increase their lifestyle as their income grows. It's tempting to spend more when you make more, but true wealth often requires discipline and delayed gratification. Becoming wealthy means making intentional trade-offs. That might mean reinvesting in your business, putting a down payment on a rental property, or consistently investing in the stock market. Rather than inflating your lifestyle, put your money to work. There's an important difference between being rich and being truly wealthy, and it often comes down to owning assets. The rich may earn high incomes that support a luxurious lifestyle, but the wealthy prioritize acquiring income-generating assets that work for them while they sleep. Earning a solid income is important, but it's rarely enough on its own to build long-term wealth. To reach and sustain true wealth, you can't rely solely on your labor. You need assets that generate cash flow with minimal day-to-day involvement. These assets might include equity investments, real estate with a trusted property manager, or a business supported by a reliable team. Jovan Johnson, CPA and CFP, is the co-owner of Piece of Wealth Planning and specializes in strategic tax planning, personal financial planning, and small business accounting. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
