I’m a Money Expert: Best Ways To Build Wealth After 40

When you think about building wealth after 40, you might first think of investing. While that’s definitely a good strategy, it’s not the only one to consider. Sometimes, not-so-direct paths to wealth can make a significant impact on the amount you amass in your retirement accounts.

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Consider the broader picture of your financial health and security, ensuring that all aspects of your financial plan work together to support your long-term goals. By taking this well-rounded approach, you can build the kind of wealth you need for a secure future .

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Protect Your Assets and Earning Potential

Griff Harris , a certified insurance counselor, said one way to build wealth after 40 is risk management through proper insurance planning.

“Ensuring your assets and earning potential are protected against unforeseen circumstances is a foundational step toward building wealth,” he said. “For instance, I’ve seen clients recover swiftly from business interruptions because of tailored insurance programs we put in place. This protection keeps financial goals on track despite setbacks.”

Minimize Policy Loans

Bill Boersma, owner of OC Consulting Group , said it’s important to minimize insurance policy loans and ensure timely repayment if you do take one.

“We’ve seen cases where clients were tempted to borrow against their policies but created repayment plans to maintain the policy’s long-term viability,” he explained. “This approach preserved the cash value and death benefits, which ultimately contribute to a stronger financial portfolio. Understanding the tax advantages of life insurance can also play a significant role in estate planning, helping to lower estate taxes and ensuring a smoother wealth transfer to beneficiaries.”

Diversify Your Investments

Investing is also an important part of your wealth-building plan. And if you know anything about investing, you know it’s important to diversify.

“From my time at Marsh & McLennan and Arthur J. Gallagher & Co., I learned the importance of balancing different types of investments,” said Harris. “For individuals over 40, blending stable, income-producing assets with growth assets can optimize returns while minimizing risk. For example, allocating part of your portfolio to dividend-paying stocks and another to index funds can provide income now and growth for the future. I advise clients to regularly review and adjust their portfolios to align with changing market conditions and personal goals.”

Pay Off High-Interest Debt

Michael D. Ashley, finance expert at Richiest.com and strategic chief of staff and transformation leader with over 20 years of experience in financial services, said reducing or eliminating high-interest debt is essential for building wealth.

“High-interest debts, such as credit card balances and personal loans, can eat away at your income, making it difficult to save and invest for the future,” he said. “By paying off these debts, you free up more money to allocate towards savings, investments and other financial goals. Being debt-free also provides a sense of financial security and peace of mind.”

Invest in Skills and Education

Another way to build wealth is to continue to invest in your education and skill development, which can greatly impact your earning potential, Ashley said.

“Whether it’s gaining new certifications, attending workshops or pursuing advanced degrees, enhancing your skills can lead to higher-paying job opportunities and career advancement,” Ashley said. “In an ever-evolving job market, staying competitive and adaptable ensures you can command a higher salary and secure better job positions, ultimately contributing to your wealth-building efforts.”

Expand Your Income Sources

Ashley also pointed out that increasing your income sources can significantly boost your financial stability and wealth-building potential.

“This can include seeking higher-paying job opportunities, starting a side business or investing in income-generating assets,” he said. “Diversifying your income streams not only enhances your earning potential but also provides a safety net in case of job loss or economic downturns. By leveraging your skills and exploring new opportunities, you can create additional revenue streams that contribute to your overall financial growth.”

Invest Time in Professional Development and Networking

Harris said maximizing your earning potential through continuous professional development and networking is also a way to build wealth.

“Many of our clients have significantly increased their income by pursuing advanced certifications or engaging with local business communities,” he explained. “An example is a client who doubled their client base through strategic networking and skill-building efforts, directly impacting their wealth positively.”

This article originally appeared on GOBankingRates.com : I’m a Money Expert: Best Ways To Build Wealth After 40