The 5 biggest financial decisions you will have to make in your life

1. Marriage and family planning

2. Housing

3. Education and career

4. Investments, savings, and spending strategy

5. Lifestyle choices (health)

Marriage and family planning

Perhaps no greater influence over long term wealth accumulation is whether or not you will pursue financial stability with a partner.

Those who are married are happier, live longer, and have a median higher net worth than single individuals. The math is pretty simple, in that two incomes often outgrow a single income.

But having a family also encourages the married couple to pursue wealth building goals in a way that a single individual is not forced to do. A married couple with kids will pursue the purchase of a single family home, which has been a proven method of building wealth in America. Marriage also encourages some risk off behavior like increasing savings and building retirement accounts.

Having more people to be responsible for increases not only financial accumulation but also expense. Having children is a huge expense. But having a spouse with similar values and goals can help the marriage thrive in spite of increased costs.

The largest risk to wealth in a married relationship is divorce. Much of the wealth built is dispersed and expensed in divorce proceedings. That does not include the emotional toll on the family in the divorce.

Housing

Do you know what some consider the best predictor of whether a kid will grow up to be successful?

Their zip code.

A house can build equity, proving to be an asset that maintains value amidst a constantly inflated world. This strategy hosts many risks, as a house is expensive to acquire and also can become a nightmare for owners if unforeseen expenses arise. And yet, when the home is maintained and in a good location, housing proves to be a valuable and profitable investment.

Beyond the obvious, where you live matters just as much as whether you rent or own. Where you live gives you access to business opportunities, access to social circles, access to education for children, and other tailwinds that influence growing wealth.

Education and career

This serves as one of the more obvious influences on wealth accumulation. The financial gain you are rewarded for the value you create is an individuals staircase to wealth’s final destination.

The money you bring in covers expenses, builds savings, and procures investments. You must choose a career and the corresponding education and training required that can meet your financial aims, or change your financial aims.

One of the hidden dangers of investing in education and training is the debt that often is attached to acquiring the eduction or training. Students are graduating with tens of thousands of dollars in debt, placing a burden on wealth creation.

Investments, savings, and spending strategy

There are so many avenues someone could choose to invest and save their money.

The truth is, in an economy that rewards debt and value creation by inflating the dollar, you will never be able to save your way into wealth. The money you save decreases in value 2% a year on average, sometimes more. Your savings are like a melting ice cube.

You will have to invest, but in what? That is totally up to you and your risk preference. Some will choose real estate. Others a classic 60/40 stock and bond investment portfolio. Others will go risk on and try to invest in up and coming companies in the stock world. You may be wealthy enough to invest in private ventures.

I think one rule of investing will always remain true: the things that create value will always be valuable.

If you see a company that provides a lot of value in the world you see and the world around you, chances are it’s a good investment.

Lifestyle choices

There is no limit on how much poor health can cost you.

Take someone who eats well, moves their body, and does not consume alcohol or smoke. They reduce their chances of developing cancers and heart problems and inflammation caused diseases by a large margin.

Someone who consumes bad oils and sugars, alcohol, smokes, does not move their body, carries extra weight. A person who partakes in any of these things increases their risk factors of developing prolonged health issues.

Health issues are exorbitantly expensive in the United States.

On top of the expense of doctor visits and hospital stays and pharmaceuticals, having poor health impacts your ability to earn and thrive. A healthy individual can work longer and can focus on the job at hand rather than their failing health.

What did I miss? What has been your experience in building wealth? What has been your greatest investment?

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