Many of the financial habits people believe will help them build wealth can actually limit long-term financial success when applied without context. In a recent article featured in MoneyLion, AOL.com, and MSN.com, titled “I’m a Financial Planner: 4 ‘Wealth-Building’ Habits That Don’t Always Deliver,” journalist Martin Dasko explores several common strategies that financial professionals frequently see backfire.
The article examines habits that can unintentionally hold investors back, like keeping too much money in “safe” investments, concentrating too heavily in a single asset class, avoiding credit altogether, and relying exclusively on traditional tax-deferred retirement accounts. While each approach may seem prudent on the surface, financial planners explain why a more balanced strategy often produces better long-term results.
Our Chief Investment Officer and CEO, Steven Rogé, shared that successful wealth building is often less about following popular financial rules and more about understanding how those decisions affect your financial flexibility over time. He pointed out that avoiding credit entirely isn’t always the smartest financial move. While staying out of debt is important, responsibly using credit can help establish a strong credit history, leading to more favorable borrowing terms for major purchases like a home or vehicle. Over time, even modest differences in interest rates can translate into significant savings.
Steven also discussed the importance of tax diversification in retirement planning. While many investors consistently contribute to traditional 401(k) plans, they may overlook Roth options that are now available through many employer-sponsored retirement plans. By building assets across taxable, tax-deferred, and tax-free accounts, retirees often have greater flexibility when deciding how and when to generate income throughout retirement. In addition, today’s relatively low tax environment creates planning opportunities that many investors shouldn’t ignore. Evaluating whether Roth contributions or Roth conversions make sense can potentially improve long-term tax efficiency, depending on each individual’s circumstances.
The article serves as a reminder that a thoughtful, personalized strategy that considers taxes, credit, diversification, and long-term goals can help investors make more informed financial decisions.
Click here to view the full article.
For tailored, fee-only guidance on managing your wealth or questions about investment strategies, please contact our team of CERTIFIED FINANCIAL PLANNERTM (CFP®) professionals for a complimentary discovery call at 631.218.0077, or click here. We would be happy to show you how our financial planning process can help you stay on track and achieve your financial goals. You can also send us a message directly.
R.W. Rogé & Company, Inc. is an independent, fee-only financial planning and investment management firm serving clients locally and virtually across the country, with Long Island, New York, and Beverly, Massachusetts office locations. R.W. Rogé & Company, Inc. was founded on a “client first” culture and proudly commits to acting in your best interest as a fiduciary. We have helped clients Plan, Achieve, and Live® the life they want since 1986. To learn more about how we do this, as well as our process, explore our detailed overview of services and approach.
