Building Wealth: 6 Strategies from Real CFPs

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You’re contributing enough to your 401(k) to get a match from your employer. Maybe you’re maxing out your 401(k).

You don’t have high-interest debt, or you’re working on a strategy to pay it off.

What’s next?

Wouldn’t we all love to know? I’ve worked at NerdWallet for almost six years and I don’t have an answer. But I talked to some certified financial planners and got some ideas.

“You can max out two retirement plans at the same time,” he says. “You can hide a lot.”

“Sometimes people will come to me and they say, ‘Well, I have all these student loans. Should I just put all my money into student loans and not put any money into savings or investments or retirement?'” says Adrienne Davis, Bowie, Maryland-based CFP for Zenith Wealth Partners.

“And that’s when I say, ‘Absolutely not.’ We want to make sure we’re still preparing for the future.

Preparing for the future means diversifying your investment vehicles, says Lazetta Rainey Braxton, a CFP based in New Haven, Connecticut.

“I really want all of my HENRYs to have a taxable brokerage account,” says Braxton, founder of The Real Wealth Coterie.

Investing in the stock market through a brokerage account is something many people shy away from, Johnson says. He says that social media influencers have realized that getting rich can be quick and easy. But securing a large bag is usually a long game.

“Most wealth is built up through generations,” he says. “It takes time.”

“If you’re looking to acquire real estate, it’s a good way to transfer wealth,” says Naima Bush, a CFP and chartered financial consultant with Fruitful Advisory, based in Northern Virginia.

Say you get a raise or bonus. You are looking at a new luxury car. Do you want the $1,500 a month car note that goes with it? Davis says it’s money that can be invested.

Even small items purchased regularly can be included. Bush says you’ll love that $45 Fenty Beauty Body Butter. But do you really? the need This?

“It’s okay to have Trader Joe’s or a lower-priced brand,” she says.

“The easiest way to avoid a lifestyle is to let a little lifestyle creep in,” he says.

Most of the CFPs I spoke with, like me, didn’t learn much about growing money.

And many HENRYs are first-generation wealth-builders, Bush says.

This can come with the pressure of providing for family members.

If helping relatives is important to you, most CFPs advocate setting boundaries. Davis says you can set aside a certain amount to give, and when it’s gone, it’s gone.

Johnson says that setting boundaries seems easy but maintaining them is difficult.

“Let’s be honest, we’re all human,” he says. “Even for me, I don’t see a situation where I would say, ‘I’m going to put myself first,’ and not help my mom.”

Braxton says some of her high-earning clients live frugally to balance long-term care for elderly parents. You just have to be honest with yourself and your advisor about how you want to live and spend your money.

“What are non-negotiables?” She says, “If you can’t do that, what will hurt your heart?”

Also, she says, your heirs should know enough about money to keep what you’ve built.

Johnson says he’s seen people inherit life insurance lump sums, and within a year, it’s gone.

“If knowledge isn’t transferred with money, all that wealth can disappear really quickly,” Johnson says.

Both Braxton and Johnson urge parents to start teaching children early on about credit, debt, spending, saving and investing.

She says that’s what she wants for more children.