Welcome back to the net worth podcast this week we are diving into rethinking personal wealth management and its profound power for net worth growth.
Speaker 2: Check out the full edition on our website we are no wearenoyack.com.
Speaker 1: They were doing a deep dive really digging into the latest insights from no yak wealth weekly.
Speaker 2: The goal here is to pull out what truly matters to help you build lasting wealth and uh yeah growing net worth in a way that actually fits your life.
Speaker 1: So let’s unpack this core idea from this edition first it kind of challenges how we normally think about wealth right.
Speaker 2: You know the old ideas.
Speaker 1: land, maybe pensions, gold, these classic markers.
Speaker 2: But this edition suggests those might be well a bit outdated now.
Speaker 1: What’s this really mean for us today for building an worth?
Speaker 2: Yeah, it’s a really fascinating shift when you look at it.
Speaker 1: Historically, wealth was very much about, you know, tangible things you could own, the security they represented.
Speaker 2: But what our analysis in this edition highlights is that especially for younger generations think millennials, Gen Z wealth is much more tied to things like well-being, freedom.
Speaker 1: um having control over your time, your choices.
Speaker 2: And this isn’t just like a philosophical point.
Speaker 1: It directly impacts net worth strategy because it means you’re not just piling up any assets, you’re building a portfolio strategically with assets that actually support that bigger picture freedom, resilience, living by your values.
Speaker 2: That totally reframes it.
Speaker 1: It makes wealth less like a number on a page and more dynamic, like an engine for the life you want.
Speaker 2: But this edition also brings up something really interesting, this paradox.
Speaker 1: Why do so many high earners, people making good money, often struggle to actually build significant wealth?
Speaker 2: To see their net worth really take off, it seems counterintuitive.
Speaker 1: It’s a question we see a lot.
Speaker 2: I mean, the assumption is simple.
Speaker 1: Earn more, have more.
Speaker 2: But like this edition points out, it’s just not always true.
Speaker 1: There are these common pitfalls.
Speaker 2: Lifestyle inflation is a big one, right?
Speaker 1: You get a raise, your spending just creeps up to match it.
Speaker 2: Suddenly there’s nothing extra left.
Speaker 1: Or uh high interest debt.
Speaker 2: Credit cards, personal loans, that stuff can snowball and just eat away any progress you make.
Speaker 1: And then there’s this other thing, investment paralysis.
Speaker 2: You have maybe too many options or you’re scared of making mistakes.
Speaker 1: Oh, you do nothing.
Speaker 2: And your money just sits there.
Speaker 1: All these things, they’re often behavioral, right?
Speaker 2: They can seriously hold back your net worth growth, regardless of income.
Speaker 1: So it really drives on the point that it’s not just about the paycheck.
Speaker 2: It’s what you do with it.
Speaker 1: You need a system.
Speaker 2: Like this edition says, and I thought this was spot on, hard work alone isn’t enough.
Speaker 1: Money needs a system.
Speaker 2: Otherwise it comes in one door and goes right out the other.
Speaker 1: It really boils down to that, doesn’t it?
Speaker 2: Having a plan.
Speaker 1: Precisely.
Speaker 2: Without that structure, that intentionality, even a great income can just sort of disappear.
Speaker 1: The core message is that building net worth isn’t just about earning.
Speaker 2: It’s about how much you keep and how effectively you put that capital to work over the long haul.
Speaker 1: It means shifting from just spending to really designing your finances.
Speaker 2: OK, so building on that idea of financial design.
Speaker 1: This edition talks about DIY wealth management, a more hands-on approach, moving away from just handing everything over to someone else and hoping for the best.
Speaker 2: What does this do-it-yourself thing look like in practice if you want to boost your net worth?
Speaker 1: Well, this DIY approach, as we outline it, is really about empowerment, taking control.
Speaker 2: It’s not necessarily doing everything solo, but understanding the levers you can pull.
Speaker 1: Our insights point to three core strategies here.
Speaker 2: First, is actively looking beyond just stocks and bonds, thinking about alternative investments, things like real estate, maybe fine art, even venture capital.
Speaker 1: Second, treating your finances like a business, especially when it comes to tax optimization, being really proactive there.
Speaker 2: And third, building multiple income streams.
Speaker 1: That could be rental income, a side hustle you’re passionate about, dividends from investments.
Speaker 2: Each one of these directly feeds into building that freedom, that control, that resilience we talked about.
Speaker 1: And that’s the foundation for real net worth growth.
Speaker 2: That sounds incredibly powerful for the listener.
Speaker 1: It really turns net worth from just a number into like a measure of personal progress, right?
Speaker 2: Financial independence in action.
Speaker 1: So this edition then lays out four really practical steps, pillars it calls them, for building wealth and your net worth using this DIY mindset.
Speaker 2: Let’s dive into those.
Speaker 1: Pillar number one, budget like an investor, not a spender.
Speaker 2: Okay, this edition mentions the 50-30-20 rule.
Speaker 1: Many people have heard of it, but how does applying it with an investor’s focus help build net worth right from the start?
Speaker 2: Yeah, the 50-30-20 rule is a great starting framework.
Speaker 1: Simple.
Speaker 2: 50 % of your after-tax income for needs housing, food, utilities.
Speaker 1: 30 % for wants the fun stuff, dining out, hobbies.
Speaker 2: And then, critically, 20 % dedicated directly to wealth building.
Speaker 1: This isn’t just leftover savings.
Speaker 2: It’s for investing, paying down high-interest debt aggressively, building that emergency cushion.
Speaker 1: The key pro tip here, the investor mindset part, is allocating that 20 % first, before you even think about the wants category.
Speaker 2: That pay yourself first idea makes wealth building automatic.
Speaker 1: It ensures consistent saving and investing, which leads directly to steady net worth growth over time.
Speaker 2: And for your listeners, it’s a guideline, right?
Speaker 1: You might adjust it.
Speaker 2: Maybe you’re aiming for early retirement, so you push for six to 2020, or even more aggressive on the wealth building slice, it’s flexible.
Speaker 1: All right, that pay yourself first is the behavioral linchpin, the real game changer.
Speaker 2: OK, so you’ve got that 20 % alligator, what’s next?
Speaker 1: Pillar two, invest early, often and intelligently.
Speaker 2: This edition uses this really powerful example about compounding, investing $500 a month starting at age 25 versus starting at 35.
Speaker 1: The difference in the end result and your net worth is just massive, isn’t it?
Speaker 2: Oh, it’s incredible.
Speaker 1: It’s the magic of compounding, really.
Speaker 2: As the example shows, that $500 a month, assuming like an 8 % return starting at 25.
Speaker 1: could grow to roughly $1.5 million by 65, start just 10 years later at 35 with the same amount and same return.
Speaker 2: You end up with less than half of that.
Speaker 1: It’s a huge difference.
Speaker 2: It just hammers home how vital time is.
Speaker 1: And the discipline, right?
Speaker 2: Early, consistent contributions are key for that long-term net worth trajectory.
Speaker 1: But it’s not just about consistency.
Speaker 2: This edition also stresses investing intelligently, which includes diversification.
Speaker 1: And not just stocks and bonds.
Speaker 2: Thinking about those alternatives we mentioned.
Speaker 1: Fine art.
Speaker 2: uh Real estate syndications where you Cool money with others for bigger deals, maybe some venture capital.
Speaker 1: These aren’t just for the super wealthy anymore.
Speaker 2: There are platforms now that give regular informed investors access.
Speaker 1: They can add some real dynamism, potentially better returns to your portfolio.
Speaker 2: Diversifying like that makes so much sense for building a portfolio that can weather different conditions.
Speaker 1: Okay, next pillar, next debt.
Speaker 2: Debt often gets treated like this financial four letter word, avoid it entirely.
Speaker 1: But this edition suggests a more nuanced view using debt as a tool, not letting it become a trap.
Speaker 2: What’s the real difference between good debt and bad debt for our net worth?
Speaker 1: Yeah, that’s a really important distinction to make.
Speaker 2: Leveraging finances strategically.
Speaker 1: So bad debt, as we outline it, is typically high interest debt used for things that lose value.
Speaker 2: Think credit cards for consumption, most car loans.
Speaker 1: It actively erodes your wealth, drags down your net worth.
Speaker 2: Good debt, on the other hand, is used strategically.
Speaker 1: It’s borrowing to acquire assets that are expected to grow in value or generate income, like a mortgage, on a sensible investment property, maybe student loans for a degree with strong earning potential uh loans to start or grow a business.
Speaker 2: The key isn’t just the debt itself, but the return you expect from using it.
Speaker 1: Smart debt can actually amplify your opportunities and contribute positively to your net worth over time.
Speaker 2: And of course, the addition also touches on managing existing debt effectively.
Speaker 1: Using strategies like the avalanche method, tackling high interest debt first, or the snowball method, paying off smaller debts for quick wins and motivation.
Speaker 2: tools to get things under control.
Speaker 1: distinction is crucial.
Speaker 2: Using debt purposefully, not just reactively.
Speaker 1: OK, final pillar.
Speaker 2: Reduce taxes to retain more wealth.
Speaker 1: This feels like a big one that maybe doesn’t get enough attention.
Speaker 2: It’s not just what you earn, but keeping more of it, right?
Speaker 1: Exactly.
Speaker 2: Taxes can easily be one of your single biggest expenses over your lifetime if you’re not strategic.
Speaker 1: So this edition really emphasizes maximizing those tax advantaged accounts.
Speaker 2: Your 401Ks, IRAs, Roth IRAs.
Speaker 1: and health savings accounts, HSAs.
Speaker 2: HSAs are amazing, actually.
Speaker 1: Triple tax advantage.
Speaker 2: Contributions are deductible.
Speaker 1: Growth is tax free.
Speaker 2: And withdrawals for qualified medical stuff are tax free.
Speaker 1: Powerful tool.
Speaker 2: Beyond accounts, there are strategies like tax loss harvesting that’s uh selling an investment that’s down to offset gains elsewhere, maybe even some regular income.
Speaker 1: You have to be careful with the rules, like the wash sale rule, but it can save you significant tax dollars.
Speaker 2: By actively managing your tax situation, you keep more of your returns working for you, compounding over time.
Speaker 1: That directly boosts your net worth.
Speaker 2: It’s about planning ahead, not just dealing with it in April.
Speaker 1: OK, so pulling this all together, what’s the big picture for the listener who wants to grow their net worth in today’s world?
Speaker 2: These insights from Noyack Wealth Weekly, they really point towards needing proactive systems, strategic investing, including alternatives, being smart about taxes, using debt wisely.
Speaker 1: It feels like it’s less about just having assets listed somewhere and more about owning assets that truly line up with your goals and can actually sustain you.
Speaker 2: Absolutely.
Speaker 1: And if you connect this to what’s happening now, particularly for millennials in Gen Z, it’s clear why this matters so much.
Speaker 2: They’re dealing with a totally different financial world.
Speaker 1: The great wealth transfer is happening.
Speaker 2: Economic realities are shifting.
Speaker 1: This modern approach to wealth management, the wearenoyack.com way, it’s less about just handing your money off passively.
Speaker 2: It’s about empowerment.
Speaker 1: It’s about giving you the knowledge, the tools, and encouraging that intentional action.
Speaker 2: This DIY goals first mentality, it really turns net worth from just numbers on a screen into a real journey of personal progress, guided by freedom, by purpose.
Speaker 1: Yeah, this whole deep dive really hammers home that taking active control, being the CFO of your own finances, that’s the path to a truly meaningful and resilient net worth.
Speaker 2: So here’s something to think about.
Speaker 1: In a world overflowing with information, with financial markets constantly changing, How will you choose to use these insights, this knowledge, to proactively shape your own financial future, your own freedom?
Speaker 2: Okay, before we wrap up, remember to subscribe to Noyack Wealth Weekly on our website, wearenoyack.com.
Speaker 1: That’s wearenoyack.com to read the article behind today’s conversation and to get our weekly newsletter straight in your inbox.
