Although the Federal Reserve Board is continuing to fight the current stretch of high inflation in the U.S. by steadily hiking benchmark interest rates, global influences like the Russia-Ukraine war and supply chain bottlenecks may prolong the bout longer than most expect.
And with the constant threat of a recession looming, Americans are pursuing numerous ways to combat inflation by actively building their financial worth. According to a new study by the Western & Southern Financial Group (W&S), 62% of Americans credit inflation for strengthening their commitment to building personal wealth.
The study found that Americans are building wealth using a variety of strategies and for a variety of reasons, including creating an emergency fund for their families, setting themselves up for retirement, staying fiscally sound during inflation and easing their financial worries.
The increased prevalence of businesses using YouTube as a marketing tool seems to be paying off, as it is the most popular source to learn about building wealth, according to W&S. Per survey results, individuals (30%) are using YouTube more than asking family members (29%), financial advisors (28%) or friends (27%) about financial and wealth-building matters.
Financial knowledge is also being sought through Google searches (27%), participating in financial workshops (23%) and consulting other social media platforms like Instagram (21%), Facebook (17%) and Reddit forums (15%).
The survey, which asked over 1,000 Americans about personal wealth-forging approaches and financial advice resources, found that the average American has just $1,000 to $5,000 in savings, but almost 98% of those surveyed profess to have at least one wealth-building strategy in place.
Aside from focusing budgeting on investing (37%), diversifying existing assets (31%), prioritizing salary over other aspects of a career (30%) and generating multiple income streams (17%), the four most popular wealth-building strategies, according to Western & Southern’s survey, are below. The full study — which also includes top wealth-building motivations and generational breakdown data — can be read here.
1. Allocating Money to Savings (48%)
Not surprisingly, 48% of respondents overall said they are focusing on budgeting with the goal of saving. With such an emphasis on creating emergency funds, saving money by tweaking or starting a budget is the first and favored plan of action for many. It’s also a strategy that can be started immediately and reap rewards in little time.
2. Playing the Stock Market (48%)
Not many people have the convenience to roll the dice or “play” with their assets while persevering through tough economic times, but individuals with a certain level of financial nous know that recognizing recurring patterns and trends in the stock market can build wealth rapidly. Among the 48% of respondents who are willing to adjust their risk level to build wealth through investing in the stock market, 53% of millennials chose this option as their favorite, compared to 51% of Gen X responders, 46% of baby boomers and 41% of Gen Zers.
3. Taking on Multiple Jobs (44%)
As the Wall Street Journal reported last year, many Americans, buoyed by their treatment by detached employers and facilitated by working remotely, are secretly working two or more jobs to build their personal wealth. Whether secret or not, workers are increasingly turning to “over-employment” not only to get by but to grow their wealth. The Western & Southern report found that 44% of U.S. residents are working multiple jobs to build wealth. According to a May 2022 survey by Insuranks, 93% of working Americans have a side hustle in 2022.
4. Investing in Real Estate (38%)Investing in property is a popular response to inflation, according to Forbes, and W&S found 38% of respondents were adopting this strategy to gain wealth. Real estate assets tend to become more valuable during inflationary episodes because a place to live, especially rental properties, is always in demand. As Jacky He, CEO of real estate investment firm DMG Investments, notes, “In the rising interest rate environment we are currently in, people are expected to choose to rent instead of committing to purchasing a home. This provides multifamily housing investors with a constant supply of renters.”
