5 money traps to avoid in your 40s

1. Neglecting to prepare for health challenges

As you age beyond 40 years do not underestimate the importance of health coverage in safeguarding your financial well-being.

As you advance in age, health issues may arise, derailing the quality of life you may have been working to achieve all this years.

Try and invest in some kind of comprehensive health insurance, consider long term care insurance to protect your assets.

• Failing to diversify investments.

Failing to diversify your investments to match your present reality may result into significant losses.

Some investors do not employ any investment strategy in maintain their wealth; you are not alone if you do not know how to properly manage or diversify your investment.

This is where a professional brings value in helping you craft a plan and bring value to your plan and become strategic partners in meeting your goal.

Building and maintaining wealth is a team sport. Build your team of investment lawyers, tax accountants, insurance brokers, real estate experts, stock brokers, bankers and other financial professionals.

• Managing elderly parent cost and dependent relatives.

Providing care for aging parents and other dependent relatives may strain your finances as much as your emotional resources.

It is advisable to work closely with your family members so as to understand their financial situations and create a budget or fund for care giving service expenses.

• Neglecting to plan for retirement.

Many people aged 35 – 55 have never tried to comprehend their financial situation neither have they never tried to calculate how much money they will need to live comfortably in old age.

Many people believe they will start planning for retirement once they arrive at a certain level of success. They fact is that they time value of money and compounding gains is very integral to wealth building.

Start wherever you are on the financial trajectory with whatever you have in your hands and begin building wealth immediately.

• Underestimating emergency funds

Look at emergency fund like a financial amour, some kind of opportunity funds you have amassed through saving to take care of unexpected expenses that may attempt to derail your financial stability.

Reevaluate your expenses often, and aim to have at least six months’ worth of living expenses in an accessible money market fund.

One way to do this is to squirrel any difference between your income and expenses and any work bonuses directly into the fund.

• Spending money on non-essentials.

Pretending to be rich won’t do any good to your financial, wellbeing, purchasing expensive from active income from active income like salary is a recipe for financial headache down the road of money abundance.

It is advisable to first spend money on acquiring assets that cash flow and then utilize interest accrued to this asset to fund your rich lifestyle.

Lack of discipline in this one area of behavior is why many folks are poor and don’t seem to know how to get out of the rat race. Wealth is built slowly over a long term.

Do away with the wild parties and every other conspicuous consumption that doesn’t put money in your pocket, rather concentrate now on building lasting wealth by saving and investing in assets that cashflow.