George Kamel’s 11 Next Steps for New Millionaires
What should you do next once you have done the hard work to build a substantial amount of wealth? For those unsure of what it means to be "wealthy," money expert George Kamel defines it as being completely debt-free with a paid-off house and a net worth of $1 million or more.
If you find this definition describes you, it’s officially time to start enjoying the money you worked so hard for. You don’t have to do everything Kamel recommended in his YouTube roundup of 11 ways to have fun with your money after becoming rich, but it's worth reviewing.
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Just pick a few favorites that excite you most from the list below.
1. Go for the Extras
Give yourself a break from living with an extremely frugal mindset and start investing in small quality-of-life upgrades. These upgrades, like buying a nicer couch, won’t wreck your finances and allow you to enjoy your hard-earned money.
2. Get a New Car
Once your net worth exceeds $1 million, Kamel said it’s okay to buy a brand-new car if that’s what you really want to do.
Before making this purchase, however, he did recommend paying cash for it and making sure the total value of all the vehicles in your life isn’t more than half of your annual income. For example, if your household income is $120,000 annually, the total value of your automobiles should not exceed $60,000.
3. Max Out Retirement Investing
You’re already on the right track if you’re investing the recommended 15% of your income into retirement accounts.
Once your home is paid off, Kamel said you can take these investments even further since you now have more margin. Start maxing out each tax advantaged account you have, like a 401(k), Roth IRA and HSA.
4. Invest Beyond Retirement
If you already maxed out your retirement accounts, the next step is to build wealth you can access earlier than the traditional retirement age.
Kamel recommended exploring a bridge account, which is a general non-retirement brokerage account. It may not be tax advantaged like a 401(k) or Roth IRA, but it will give you the freedom to invest and make withdrawals early without incurring penalties.
5. Work on Your Generosity Bucket List
Kamel recommended asking yourself, “What have you always wanted to do for someone else but couldn’t afford to?”
You might consider funding a college education for the children of family members or friends, covering a family’s adoption costs, paying for a down payment on your child’s home or buying a car for a single mom. Your million-dollar net worth means you can afford to take your generosity to the next level.
6. Create a Legacy Plan
What will happen to your wealth when you’re gone? You need a plan in place consisting of a will with up-to-date beneficiaries, power of attorney and making sure your assets are protected.
“The point of a legacy plan isn’t just to pass on money wisely,” Kamel said. “It protects your loved ones from confusion, legal messes and unnecessary stress. A good plan gives them peace and honors the work you’ve done.”
7. Upgrade Your Home
Now that you have 100% equity and no more mortgage payments, you have lots of options for upgrading your home. You might choose to renovate for a better layout or move to a new home where there’s more space.
8. Invest in Real Estate
Consider exploring rental and investment properties to diversify your portfolio and create another income stream.
Like buying a new car, Kamel recommended doing your due diligence (knowing what it means to invest in real estate as a business and preparing yourself for the hard work involved) and paying cash. The latter move ensures you’re not going backwards and paying another major monthly payment after working so hard to pay off your primary residence.
9. Buy Back Your Time
If certain tasks are incredibly time-consuming, guess what? You can now afford to delegate them. You might hire someone to clean your home, handle your taxes or fulfill landscaping duties. The extra time you buy back allows you to spend more time on what matters to you.
10. Buy a Vacation Home
This might be a lake house, beachfront property or a cabin in the mountains. Remember to pay cash for this purchase and take into consideration the vacation home’s ongoing costs, like utilities, property taxes and maintenance.
11. Create Unforgettable Experiences
Now’s the time to check major items off your bucket list and create lasting memories, like traveling around the world with the people you love.
As Kamel said, this is not as much about spending money as it is investing money in loved ones and stories you’ll remember for the rest of your life.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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