7 Ways to Build Wealth When You’re Low on Time

Building wealth takes a long-term mindset. As you approach retirement, when you'll need the bulk of this money, you'll want several accounts growing alongside each other. The main reason for this is taxes. Having different tax-advantaged accounts gives you flexibility now and later. This combination of accounts offers the most tax benefits. The smart order of withdrawals during retirement, to save the most on taxes, is typically 1) Brokerage, 2) 401k, 3) Roth 401k, and 4) HSA for medical expenses along the way.

This is where automation happens. Once you have the right accounts set up, turn on auto-deposits going into each one. Your employer makes it easy to accomplish this with your 401k since it comes right out of your paycheck. With the other accounts, like your brokerage, you can easily turn on automatic deposits to be pulled from your checking account and into your investment accounts at an amount and frequency of your choosing. I have mine set up as bi-weekly deposits, around the same time my paycheck hits my bank account.

Let's say you choose an investment portfolio that's 60% stocks, 40% bonds. That's the one that lines up with your goals in this example. Over the course of weeks and months, the stock portion of your portfolio might outperform bonds and become an even bigger piece of the pie. Maybe it's 70% stocks, 30% bonds now. To get your asset allocation back to your 60/40 portfolio, you'll want to sell 10% from stocks and add it to bonds. Most Robo advisors and retirement plans make this super simple with an automatic rebalance feature. Turn it on, and you're good to go.

Yes, I'm serious. It adds up quickly, and you won't miss the “spare change.” In 2020 I saved an extra $2,500 using a micro-investing app, all without noticing the money leaving my checking account. Here's how it works: download a micro-investing app (my favorite is Acorns) and link your spending accounts. When you buy coffee for $4.50, your purchase is rounded up to the nearest dollar, and that $0.50 is automatically invested in a diversified portfolio of low-cost investment funds. It's one of the sneakiest ways to save and invest more money, and it takes very little effort on your end.

If you have 3–5 goals competing for your income at one time, you'll probably be investing differently for each one. Investing for financial independence in 20 years will not look the same as saving for a house down payment in three years.

Yes, it's boring as hell to talk about insurance and estate planning. But as they say, building wealth is one thing…keeping it is another ball game. Morgan Housel made this clear in his book The Psychology of Money . “The Forbes 400 list of richest Americans has, on average, roughly 20% turnover per decade for causes that don't have to do with death or transferring money to another family member.” What makes up your protection plan? Do the hard thing. Batch this boring (but incredibly important) part of your financial plan this weekend. You won't regret it.

There's too much noise thrown around the finance world. If every headline and stock price movement actually mattered, you'd have no time for the rest of your life. Instead, you'd be glued to CNBC, watching Jim Cramer shout about stocks until he has an aneurism. Skip the noise and time-suck. Instead, curate the “need to know” information that has a real impact on your wealth by signing up for an email newsletter. Here are a few I read every week.

Twitter is powerful because you can curate a feed of smart people and learn from them every day. For investors who want to better understand the world around them, these are just a few people to follow on twitter.

The ultimate flex when you're short on time is hiring someone smarter and better than you at building wealth. The feeling of overwhelm, especially with taxes and investing, drives clients to seek help. Do you think jeff bezos or bill gates spend their time clicking transfer buttons and picking stocks? Hell no.

At some point, you face the law of diminishing returns. There's only so much time in the day to split between work, family, and hobbies. Just as you would hire a virtual assistant or begin building a team in a growing startup — with success, consider using these tips to scale your personal wealth-building efforts.