With today’s rising inflation and economic turmoil, preserving your wealth can seem impossible. We’re met with news of Silicon Valley Bank failing, the Federal Reserve raising interest rates, and businesses closing their doors.
But as much as your hard-earned dollars seem to be losing buying power, some strategies can help you preserve your wealth and protect yourself well into the future.
Ways To Preserve Your Wealth In 2023
Diversifying your assets is a long-touted way of mitigating risk regarding investments and protecting wealth. However, it only works if you know what to put your money into.
Here are some of the best investment ideas in today’s market:
Tax-Advantaged Accounts
Planning for the future means understanding how different investments can benefit you and your family long term. As you create the best plan, don’t forget to consider tax-advantaged accounts.
Accounts like IRAs are some of the best ways to grow wealth over an extended period. There are two types — traditional and Roth — and they function differently. For example, money put into a traditional IRA grows tax-free and is taxed upon distribution. And in a Roth IRA, you pay the taxes upfront before enjoying tax-free growth.
Because of different contribution level allowances, many younger people put money into a Roth because their tax bracket is typically lower than it most likely will be when they’re looking to retire.
Please remember that contribution limits can change yearly, so it’s always a good idea to know the income restrictions and contribution levels before incorporating these accounts into your overall wealth preservation strategy.
Precious Metals (Gold And Silver)
As you’re considering options to preserve your wealth, it’s worth considering putting some of your assets into precious metals, such as gold and silver.
These offer potential liquidity as other investments go up or down in value, and gold has a track record of increasing in value during economic distress.
Cryptocurrencies
While it’s newer than other investments, cryptocurrency is also interesting as you seek to preserve wealth. There are many crypto coins and tokens, and each blockchain has different rules and functionality. Because of this, crypto does tend to be riskier and doesn’t have the oversight traditional banks do.
However, they don’t tend to move in the same direction as traditional investments, such as stocks and bonds, so they could be a great alternative when traditional markets are at their trough.
Make Preserving Your Wealth A Priority
You can’t change what’s happening in the financial world around us, but you can focus on preserving your wealth by using proper diversification strategies.
As we’ve mentioned, when inflation is rising and purchase power is low, it’s essential to have assets tracking with different markets and values. That way, you won’t risk losing everything that should be the traditional stock market tank overnight.
Be careful not to overexpose yourself in any sector and keep an eye on inflationary trends within each market (crypto or otherwise).
The critical thing to remember is that with the proper knowledge and preparation, you stand a fighting chance against the ever-shifting economy. So, don’t be discouraged if inflation rises 6-7% annually. Be prepared.
