Economic uncertainty has cast a shadow of financial insecurity over households, regardless of their bank balances. Rising child-care costs, surging auto loans, soaring mortgage rates, and record-high rents are contributing to these feelings. Even millionaires, often viewed as financially secure, are not immune to these concerns.
According to Northwestern Mutual’s 2023 Planning and Progress Study, about one-third of those with over $1 million in investable assets (33%) worry about outliving their savings. Additionally, 47% of wealthy Americans acknowledge that their financial planning requires improvement. Despite their high net worth, fewer than half (44%) of all millionaires feel “very comfortable” with their financial situation, as reported by Edelman Financial Engines.
Even professionals like doctors and lawyers, known as the “regular rich,” who have stable jobs, homeownership, and well-funded retirement accounts, admit to feeling financially strained in some cases.
However, millionaires employ specific financial strategies that can enhance long-term well-being. Here are three key moves that wealthy Americans are more likely to make:
- Planning for Ups and Downs: Wealthy individuals uphold rigorous financial management standards. An impressive 84% of the wealthiest Americans have a long-term financial plan that considers economic fluctuations, compared to only 52% of the general population. They prioritize looking beyond the present, preparing for potential financial twists and turns. Maintaining a diversified investment portfolio, including stocks and high-quality bonds, is considered crucial, as these assets have historically performed well during economic downturns.
- Working with Financial Advisors: Millionaires often seek professional assistance to create a customized financial plan aligned with their risk tolerance and goals. Seven out of 10 wealthy Americans collaborate with financial advisors, which is nearly double the percentage in the general population. Financial advisors act as guides, helping individuals make informed decisions during significant life events like job changes or the birth of a child.
- Committing to Financial Plans: Financial planning leads to disciplined money management, with roughly 42% of millionaires considering themselves highly disciplined in pursuing their financial goals. In contrast, only 1 in 5 Americans claim the same level of discipline. Being disciplined involves saving more than spending, regular investing, maintaining diversification, and keeping emotions in check. A well-structured financial plan provides a roadmap for achieving goals, ensuring a more strategic approach to personal finance.
In an era marked by economic uncertainty, adopting these habits of millionaires can help individuals secure their financial futures. By planning for economic fluctuations, seeking professional guidance, and maintaining discipline, anyone can navigate the complex financial landscape with confidence.
