A Midwest couple with a $3 million net worth is questioning if they are being excessively cautious with their finances. With $767k in high-yield savings accounts and significant investments in their retirement and children's education funds, they earn a solid income from their business. However, they may not be maximizing their investment returns, as their tax burden is substantial due to the ordinary income nature of high-yield savings account interest. Exploring a more aggressive investment strategy could yield better financial growth for their future.
The couple currently has $767k in high-yield savings accounts, which is excessive for emergencies, suggesting they might be missing out on better investment opportunities.
With an APY of 4.0%, their $767k would yield approximately $30,680 annually, but this income is subject to the higher ordinary income tax rates.
Despite their strong financial foundation, the couple may benefit from diversifying their investments to improve returns, given their significant net worth and income.
Living conservatively has its merits, but this couple needs to evaluate if their super conservative financial strategy is hindering potential growth.
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