Once you have reached the upper middle class, it is easy to assume that it is just a fluid path to become richer. And yet, according to experts, this is not necessarily the case.
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“As a lawyer who advises customers with high high financial value. The biggest drain I see is real estate expenses, “said Lyle Solomon, main lawyer at Oak View Law Group. “Many customers extend to buy luxury houses in privileged areas, and mortgages consume 35 to 40% of their income – leaving no room for investment opportunities. The monthly mortgage payment of $ 6,000 from a customer could have generated $ 720,000 in yields over 10 years if they were invested instead. ”
This is only an example of expenses that could be channeled on more money strengthening accounts. You will find below the best purchases preventing the upper middle class from becoming richer.
“Many of my clients win [more than] $ 200,000 per year but are fighting to build substantial wealth, ”Kevin Shahnazari, Founder and CEO of Finlywealth.
“New luxury vehicles are one of the largest wealth drains I see among my upper middle class clients. My data shows that professionals often hire $ 800 to 1,200 months for car payments, with many vehicle exchanges every three to four years. ”
He said that a customer realized that he had spent more than $ 175,000 for luxury car payments and damping over eight years. “The money that could have increased considerably thanks to investments,” added Shahnazari.
Solomon has agreed that status vehicles are another wealth killer.
“I see customers rent [over] Vehicles at $ 80,000 at luxury or having several high-end cars, “he said.” These deprecating assets cost $ 1,500 to $ 2,000 per month in payments, insurance and maintenance that could be invested. »»
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The tuition fees of private schools without good planning of university savings creates another major wealth barrier, said Shahnazari. “Many families in my network pay $ 30,000 to $ 50,000 per year per child for private kindergarten education in the 12th year while underfunding their retirement accounts and 529 plans,” he said.
According to him, this double burden of educational expenditure – the current costs of private schools plus the future costs of college – can drain millions of long -term people of wealth accumulation.
Solomon has also noted that private training expenses considerably reduce investment capacity.
“Many customers spend $ 30,000 to 50,000 per year per child in private schools,” added Shahnazari.
