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Setting Yourself Up For Long Term Financial Success in Your 40s

You are in your forties! Congratulations - you can take a breath now. You are sought after in your field of work, your kids are of the age that they can make their own school lunches in the morning, and you can finally drop that side hustle you have had for the last decade.

But what should you be doing now for long term financial success? Let's talk about it. Here are some tips for continuing your financial success into your forties to ensure a financial legacy for your loved ones.

Establish Passive Income Strategies for Long Term Financial Success

In your forties, this is the time to start thinking about establishing passive income strategies. You want your money to start working for you, allowing your balance sheet to start growing. Talk to your spouse about passive income strategies they can also implement for the next 10 - 20 years.

Some ideas of passive income strategies include the following:

  • Running a small business or Franchise

    • From car washes to owning ice machines. Owning a small business is a great way to tip your toe into the water. Start small, learn, and then invest/ upgrade your business exposure

  • Investing

    • Municipal Bonds or Dividend Paying Stocks - just make sure you’re reinvesting. The 40’s are for growing your net worth.

  • Real Estate

    • From rental properties to renting out a room in your house. Diversifying your balance sheet into an asset that can cash flow and has long term equity appreciation has long been a way to significantly grow your wealth.

Allow the money you already have to make you more money! Dividend stocks are a great example of a passive income strategy because those who invest in this type of stock are rewarded with regular payouts of company profits.

Sharing Your Assets

A typical passive income strategy is to invest in and rent out real estate. Renting out your extra property or listing it as an Airbnb or VRBO is a solid way to let your investment make you more money. The most you will have to do is regular maintenance and repairs to the property.

Just like renting out a property that you are not using, you also have the ability to rent out a vehicle that is not in regular use within your household. Without having to work at all, you can simply rent your car through rental companies who "provide their own insurance policies to protect you and your renters..."

On the other hand, if you are not ready to slow down your work pace, you can always branch out on your own and begin a new venture.

Build Your Own Company

You are respected and sought after in your field of expertise. In your forties, you can think about possibly branching out on your own and starting a company, if you have not done so already.

During this process, your existing investment accounts should offer you some padding or income replacement while you get up and running, while also remaining focused on growing.

In your forties, it can be time to consider the more robust retirement plans potentially offered at your place of employment. An example would be a defined benefit plan or stock options. If available, purchases should be taken advantage of during this time.

If you are a 1099 employee, you can think about things like a Simplified Employee Pension Plan or a Personal Pension Plan.

If you own a business or plan to branch out and start your own, you may want to look into hiring your children now that they're a bit older and establish Roth IRAs for them or even pay them for their work!

Protect Your Financial Legacy with a Wealth Advisor

Leading up to your forties, you practiced healthy habits that built your wealth and financial legacy. Now it is time to protect the work you have put in so that it may be passed down to future generations.

Let a Financial Advisor take over the rest and make sure you stay headed in the right direction.

Park City Wealth Advisors works with your best interests in mind.

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