Something has been happening that’s surprising to many Americans. Like snow falling quietly overnight, wealth has a way of sneaking up: steadily increasing salaries, 401(k) contributions, stock options, rising home equity, inheritances. It accumulates while you’re busy living. If your financial identity hasn’t kept pace—understandably shaped more these days by inflating prices, competing tugs on your discretionary dollars, and that familiar feeling of “I’d be comfortable if I made more“—you’re not alone. A Vanguard survey found that almost 30% of millionaires feel their finances control their lives.
That said, a seven-figure net worth amassed over time comes with a set of financial benefits and complexities that can easily turn into missteps—like a surprise tax bill or family fallout after an inheritance. Recognizing that your financial life has outgrown the way you see yourself (my husband and I have been there!) is the first step.
If you’ve found yourself in the fortunate position of “hidden millionaire,” here are three common pitfalls we see, and simple ways to get ahead of them.
Mistake #1: Sitting on excess cash, or other uses of savings, while still paying high-interest debt.
Many people feel better holding a large cash cushion, especially after periods of volatility. But if your credit card interest rate is higher than what you are earning on your cash, the math flips. You can lose far more than you gain.
