5 Finance Tips the Rich Shouldn’t Ignore: Hovnanian Enterprises, Inc. (HOV), Beazer Homes USA, Inc. (BZH)

Page 1 of 2

Most financial advice is geared toward people who are struggling to reach their financial goals. But if you’ve already reached your goals, what should you do next?

The assumption that many people make is that if you hit some magic number with your net worth, you’ll be able to stop worrying about money and simply coast off your assets for the rest of your life. Yet if you take that attitude, you could miss out on some opportunities that could not only make your qualify of life better but also benefit your loved ones for generations to come. Take a look at these five tips and consider whether and how they match up against your personal values.

Hovnanian Enterprises, Inc. (NYSE:HOV)Tip 1: Take care before boosting your expectations.
The tough thing about setting long-term financial goals is that by the time the long run rolls around, your expectations may be completely different. So if you’ve been fortunate enough to meet your initial goals successfully, the temptation to reach higher for more ambitious wealth goals can be hard to resist.

For instance, in the mid-2000s, stocks had largely recovered from the tech bust, and old-economy stocks were thriving. In particular, homebuilders Hovnanian Enterprises, Inc. (NYSE:HOV) and Beazer Homes USA, Inc. (NYSE:BZH) had taken advantage of the soaring housing market to reach all-time highs. Related financial companies also did well, with title insurer Old Republic International Corporation (NYSE:ORI) and mortgage insurer MBIA Inc. (NYSE:MBI) having gained from housing activity.

Investors who rode those stocks higher faced a choice in 2006 and 2007: Scale back to lock in gains or double-down to seek a more luxurious lifestyle. Those who were aggressive ended up right in the middle of the market meltdown. The lesson: If the reasons for your initial goals are still valid, don’t put your life savings at risk unless you have legitimate new goals to pursue.

Tip 2: Consider whether you’re the giving type.
Rich people struggle with whether to leave wealth to their heirs. Although self-made millionaires like the idea of their children and grandchildren not having to start at the bottom, they also don’t want to quash the natural ambition their descendants have.

One good compromise is to give in tax-smart ways. For instance, gifts for education don’t incur gift tax as long as they’re made directly to the college or other institution. Also, by giving appreciated stock to loved ones in low tax brackets, you may be able to save on capital gains taxes.

Tip 3: Kill two birds with one stone.
If you like to give money to charity but also want to provide income for yourself or your loved ones, then a charitable trust may be the right answer for you. With a charitable remainder trust, you can donate appreciated stocks and other investments to the trust, with provisions to pay chosen beneficiaries a certain amount or percentage of the trust assets each year. Whatever’s left when those beneficiaries pass away then goes to the charity of your choice. Even better, some charitable trusts let you get a tax deduction right now for the value of the charitable gift — even though the charity won’t get the money for years to come.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!