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Strategies to Save

How to Build Wealth at Any Stage in Your Career

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Setting aside a certain amount of money each month to slowly build your savings is a key financial strategy. Overhauling your entire financial life and setting new priorities across the board is how you start building wealth.

A healthy savings account balance can help pay for your kids’ college education — but having wealth means you’ll be able to live the life you want, and pay for the college education of your grandchildren, too. You’ll need both new priorities and a great savings account to build wealth — below you’ll find our guide on how to build wealth at any stage of life.

6 Steps to Build Wealth

Set investing goals to build wealth

Your wealth-building journey should begin by setting long-term investing goals. If you’re married or share expenses with a loved one, that means having a detailed conversation about how you want to invest your money.

These are only a few points you may need to address:

The more detailed you get about these goals, the better. Because believe it or not, when it comes to investing, sometimes we’re our own worst enemy. As Matt Cooley, a certified financial planner and founder of Inspire Wealth Partners, explained, research suggests our natural biases can prevent us from making sound investment decisions. This is why it’s so important to set investing goals before funneling money into the stock market.

“Whether you’re a personal investor, an investment manager, a financial planner, or anyone else, you can benefit from understanding the internal driving forces behind your investment decisions,” added Cooley.

Invest in the stock market to build wealth

Once you’ve set goals, it’s time to invest your money in the stock market. If the stock market frightens you, Leibel Sternbach, an accredited portfolio management advisor suggests keeping in mind that since its creation in the 1800s, the market has offered an average 6% annual return — meanwhile, the current average savings account interest rate is a measly 0.27%. If you truly want to build wealth, you must be invested in the stock market.

When you invest in the market, your money grows without much effort. This is key to building wealth: passive income. If you need help figuring out how, exactly, to go about investing in the market, you can check out a robo-advisor like Betterment, which makes investing as easy as possible.

One way to break into the market is to research mutual funds that have a good historical track record and stick with them for the first few years. This will allow you to learn about the market while being invested with relatively low risk. You could also try investing in index funds, as they’re low-cost and consistent.

Don’t forget to keep building your savings

You’ll still need to build your savings as part of your wealth building strategy. One easy way to do that is to follow the 50/30/20 rule: this guideline suggests that you budget 50% of your after-tax income to needs (like paying for housing and basic living costs), 30% to wants (dining out and other discretionary spending) and 20% to savings. You might want to break each of these categories into their own separate bank accounts, which could make it easier to track. Keep those savings in a high-yield savings account.

The 50/30/20 rule will help build your savings by painting a clearer picture of your financial habits. For example, if you see that your needs are exceeding 50%, you can dig deeper and figure out why. Perhaps you need a less expensive car so your insurance isn’t so high. The concrete numbers of the 50/30/20 rule will keep you on the right track toward building a healthy savings cushion.

Reduce your expenses to build wealth

The more money you can free up from your expenses, the more you can funnel your investments for wealth. One easy place to cut back? Subscription services. Those monthly charges of $6 here and $12 there add up — and probably to a higher total than you even realize.

According to a study from West Monroe Partners, 84% of Americans underestimate how much they pay each month on subscription services. Start tracking your subscription services and then cut any that you haven’t used within the last two months.

Renegotiate your salary to build wealth

You can build wealth faster if there’s more money coming in, so try to renegotiate your salary. Before talking with your boss, research salary examples for your role and set your goal. You want to be realistic and leave some wiggle room for the actual negotiation process.

Go into the meeting with clear examples of how your performance has helped the company’s bottom line and some ways you will continue this trajectory. Your boss is more likely to give you a raise if they see your benefit.

Build wealth by avoiding lifestyle creep

Once you start getting traction in the stock market and a higher salary, don’t spend the extra money. This is the definition of “lifestyle creep” — the tendency people have to spend more as they earn more. One financial expert we spoke with cited lifestyle creep as one of the biggest mistakes that people make when attempting to build wealth: you suddenly have some extra cash and so, well of course, you buy a bigger car.

Avoid lifestyle creep by living as if you never got that raise, or never saw those extra gains from your investments. Funnel them into your investments and add more to your savings account every month. If you can avoid spending more as you earn more, you’ll turbocharge the wealth building process.

How to build wealth at any age

The first thing to keep in mind when starting to build wealth is that it’s a big picture effort. But you make that big picture happen by taking many small steps: making a budget, scheduling monthly deposits in savings, learning more about the stock market whenever you have free time.

“Above all, focus on making small incremental changes,” said Sternbach. “Don’t worry about how much you need to retire, [and] focus instead on just setting aside the savings. Any amount will do; try to increase that amount each year and two. [And] once you invest, don’t look at your investments for another few years.”

When starting out, keep a strict budget, reduce expenses and maintain your savings rate. Add additional revenue streams if you can — maybe there’s a side-hustle like selling items online that could help boost your income. Do plenty of research on the stock market and be sure to max out any retirement plans, especially if your company offers a 401(k) matching program. Remember, these small first steps will form the path that eventually leads to wealth.

Strategies for building wealth in your 20s

The sooner you start saving, the more time you’ll have to build wealth. When you’re young, don’t be so worried about setting aside huge chunks of change every month. Instead, save as much as you can and pay down debt. Stick to a detailed budget and invest in yourself through higher education. Be consistent.

“Consistent discipline is the key to building wealth,” said Cooley. “For most, it can take decades of savings to build real wealth. Building good habits and automating your saving and investing is critically important.”

How to build wealth in your 30s

Your 30s are when you should be ramping up your rate of saving and investing. Make sure you’re maxing out your 401(k) at work, as well as investing in the market outside of your retirement account.

Sternbach recommends investing in things that will eventually reduce your expenses. This includes buying a house or purchasing life insurance: “These are things that over time get more expensive, so buy them early on when they are cheap and you will save a bundle.”

Wealth building in your 40s

Be mindful of lifestyle creep in your 40s, since you’re likely making more money than ever. Increase your savings rate and diversify your investments. Make sure you’re prioritizing yourself.

“Save for your retirement first before you save for college,” said Cynthia Meyer, a certified financial planner and founder of Real Life Planning. “There are many ways to pay for college, but only one way to pay for retirement.”

Keep building wealth in your 50s

As you close in on retirement, it’s time to get a bit more protective of your money.

“Start shifting your investments to more conservative investments that have less volatility, so that if you do need to retire early you have the financial ability to,” explained Sternbach. “Few people retire when they plan to — layoffs or medical issues are a leading cause — and the last thing you want is to have to start draining your nestegg while the market is down, locking in those losses permanently.”

Where should you stash your wealth?

Build wealth by choosing the right online broker

Because investing in the market is one of the primary ways you’ll build your wealth, it’s important to choose the right investment broker. Look for one that matches your needs as closely as possible.

Hands-on investors are people who like reading about a broad selection of investment options. They like to pick their own assets, and build a portfolio themselves. The best choice for hands-on investors is an online brokerage account.

Hands-off, or passive, investors are people who want to put their money to work in the market, but would prefer not to get too involved in the details of their investment portfolio. They may not know as much about markets as a more hands-on investor, or they may have too many other things going on in their lives to devote extra time to managing investments. Hands-off investors should check out our listing of the best robo-advisors, special brokerage platforms that make investing easy.

How to choose the right savings account for your wealth

When stashing your wealth, look for savings accounts that offer you the best interest rate, and, typically, online banks have the highest rates. If you don’t already have an HSBC account, check out its HSBC Direct offering. This online-only account comes with a 1.01% APY on all balances. The catch, like we said, is that it must be your first HSBC account.

If you’re a fitness buff, check out Fitness Bank. It ties your savings rate to your monthly step count. If you log 12,500 steps or more, you’ll get the highest rate — 1.20%. However, make sure you keep your steps up, as the rate drops as your steps drop.

Credit unions also offer robust savings options. Digital Federal Credit Union offers a staggering 6.17% APY, but that’s only on the first $1,000 in the account; after that, you’ll earn 0.25% APY.

Build a CD ladder

Another strategy for stashing your wealth is to create a certificate of deposit (CD) ladder. A CD ladder is a collection of several CDs that have varying terms. You might break it out by opening a 1-year CD, a 2-year CD, a 3-year CD, a 4-year CD and a 5-year CD — all with $1,000 each. By staggering the CDs, you’re guaranteeing each CD will complete its term at predictable intervals. And because CDs carry higher interest rates than savings accounts, you’ll be sitting on a nice money generator.

The downside of a CD ladder? It’s a lot of cash locked away and, should rates increase, you won’t be able to take advantage of them if your money is tied up. However, if you’re interested in this nuanced approach of building wealth and can make it happen financially, a CD ladder could be a smart strategy.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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How to Open a Bank Account If You’re Not a U.S. Citizen

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Foreign nationals who live in the United States may open bank accounts. However, there are some hurdles to overcome as a non-U.S. citizen when applying to open an account at a bank or a credit union. While it’s perfectly legal, you should be prepared to deal with some challenging extra steps. Read on to understand all of the details below before you visit a bank branch.

What you need to open a bank account as a non-U.S. citizen

If you are a non-U.S. citizen who wants to open a bank account, financial institutions require you to present one or more of the following forms of identification:

  • Taxpayer Identification Number (TIN)
  • A passport number or an alien identification card number
  • A government-issued ID issued by a foreign country

In addition, both non-U.S. citizens and U.S. citizens need to present the following information to open a bank account:

  • Name
  • Date of birth
  • Proof of your physical address, such as a lease or utility bill

U.S. law requires financial institutions to know who their customers are and trace each of their transactions. That means banks and credit unions must verify the identity of a customer when they open a new deposit account, such as a checking account, a savings account or a certificate of deposit (CD).

In addition to the materials above, U.S. citizens need to present their Social Security number to open a bank account.

Why do non-U.S. citizens need extra information to open a bank account?

Not all non-U.S. citizens have Social Security numbers. That makes verifying the identity of a non-U.S. citizen challenging, and that’s why banks and credit unions need a foreign national’s passport number or some other government identification document to verify their identity.

Online bank account applications typically do not offer a place to input a passport number or other ID number. So institutions generally ask foreign nationals to come into a branch to verify their identity in person. This is also why it can be very difficult if not impossible for non-U.S. citizens to open an account with some online banks. In most cases, online banks do not have physical branches.

Before you visit a branch office of a bank or a credit union, make sure to check on the institution’s website or call for information about required verification documents for foreign nationals. Each institution has its own set of policies and procedures in place to comply with the requirements touched on above.

Are you a resident alien or nonresident alien?

A foreign national who resides in the U.S. is either a resident alien or a nonresident alien. You’ll need to know whether you are a resident alien or non-resident alien when you talk to an institution about opening a bank account. If you are unsure about your status, here’s how to figure it out.

Resident aliens

You are a resident alien for federal tax purposes if you hold a valid green card or pass the Internal Revenue Service’s (IRS)  substantial presence test for the current calendar year.

It’s less straightforward to determine whether a non-green card holder — such as an international student or an expats with a work visa — is a resident alien. According to the IRS, to qualify as a resident alien, you must be physically in the U.S. for at least:

  1. 31 days during the current year, and
  2. 183 days during the three-year period that includes the current year and the two years immediately before that, counting:
    • All the days you were present in the current year, and
    • One-third of the days you were present in the first year before the current year, and
    • One-sixth of the days you were present in the second year before the current year.

There are also special categories of foreign nationals who are exempt from the substantial presence test, which means their stays in the U.S. do not count as residents when they are on certain visas.

An “exempt individual” is:

  • An individual temporarily present in the U.S. as a foreign government-related individual under an “A” or “G” visa, other than individuals holding “A-3” or “G-5” class visas.
  • A teacher or trainee temporarily present in the U.S. under a “J” or “Q” visa.
  • A student temporarily present in the U.S. under an “F,” “J,” “M,” or “Q” visa.
  • A professional athlete temporarily in the U.S. to compete in a charitable sports event.

The exemption time frames differ by visa type. For example, if you are an international student, you are an exempt individual for five calendar years when you are on an F visa. Starting year six, you will be considered a resident alien if you meet the substantial presence test above.

Nonresident aliens

A nonresident alien is a non-U.S. citizen who is not a lawful permanent resident during the calendar year and does not meet the substantial presence test in the section above. Nonresident aliens can still open bank accounts in the U.S.

Do you need a Social Security number to open a bank account?

While it is possible to open a bank account without a Social Security number, you’ll need to visit a bank branch to make it happen. Because online banks don’t have physical branches for a customer to walk into and sit down with a customer service representative, it’s not as simple for these banks to verify the identity of someone who does not have an SSN.

MagnifyMoney recently reviewed four online savings accounts — Online Savings from Discover Bank, Online Savings Account from Ally Bank, Member FDIC, Marcus by Goldman Sachs® and Capital One 360. Each of these banks required a SSN and physical U.S. address to sign up for their savings account. Discover and Ally did not allow nonresident aliens to open accounts at all even if they had a SSN.

How to open a bank account without a Social Security number

Resident aliens with a Social Security number can usually finish the bank account application process online just like any other American citizen, because they are considered U.S. residents for tax purposes.

For example, at Bank of America, resident aliens can open an account at a BofA branch by presenting a Permanent Resident Card, INS Employment Card, Non-immigrant Visa, Border Crossing Card or a foreign passport, along with an additional form of identification. According to Don Vecchiarello, Jr., BofA’s senior vice president and communications manager for consumer products and small business, the options for the required secondary ID include a major credit card or retailer card, student ID, employment work badge or foreign driver’s license.

However, nonresident aliens won’t be able to do that. Typically, an error message would likely tell the person to visit a local branch or call for assistance. For this reason, it may be better for nonresident aliens to stick to banks that have physical locations. Large banks are less likely to have roadblocks for noncitizens than smaller local banks, said Ken Tumin, founder and editor of

If you are a nonresident alien, you will most likely have to visit a bank branch to get a checking or savings account with the assistance of a bank clerk. Some banks may ask for immigration documents in lieu of other identification, but it can still be tricky.

The challenge is that bank clerks may not know your status and which documentation is needed to open an account for you, explained Libby Dawson, a wealth advisor at Worldview Wealth Advisors. You may be required to provide all forms of paperwork that the bank needs to open an account for all non-U.S. citizens, even if you are a resident alien.

“They are going to follow whatever they see in terms of their own system, but at the end of the day, it’s often not until the paperwork is actually processed that you know for sure if everything has been done the way that they needed to be done,” Dawson said.

Resident aliens have online options

MagnifyMoney reviewed bank account applications for eight major U.S. banks. We found that if you are a resident alien who has an SSN, then you can open an account online with a major U.S. bank.

However, small local banks may not allow non-U.S. citizens — resident aliens or nonresident aliens — to apply online. For example, at Hills Bank, a community bank in Iowa City, Iowa, we found its online application informs the applicant that if they aren’t a U.S. citizen or U.S. person, they can’t continue the process using that method.

If you are a resident alien and hope to open a bank account online, your best shot would be a large U.S. bank that operates throughout the country. In a typical online application, you will need to enter your personal information, including name, address, phone number and your SSN.

I’m an undocumented immigrant, can I open a bank account?

You can open a bank account if you’re an undocumented immigrant at some banks, like Bank of America. However, you will likely need to apply in person and need several forms of identification, like proof of address, Taxpayer Identification Number (TIN), birth certificate, unexpired passport and more. Every bank has its own set of criteria, so be sure to research the requirements before heading to the local branch.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Switching Banks: How to Close Your Bank Account

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how to close your bank account sign says closed

If you’re not getting the most out of your bank, it could be time to get a new one.

While banks might seem similar in what they offer — checking and savings accounts, ATMs and debit cards, for example — the interest rates and account features they offer can vary widely.

If your bank isn’t meeting your needs, you should choose one that will. Here’s what you need to know about how to close a bank account.

How to close a bank account

Step No. 1: Select a new account

Before you close your account, make sure there’s a better option.

Are you hoping to find a bank with an intuitive, easy-to-use mobile app? Maybe you want a higher savings account rate. Perhaps you tend to use a lot of cash and are searching for a bank with ATM access on every corner.

A key component to opening an account is the new bank’s fee structure. Many big banks offer free checking, but have caveats such as maintaining a minimum balance.

You’d be wise to choose a bank that offers free checking with no strings attached. That way, if you suffer a financial pitfall, such as losing your job, you don’t have to worry about getting hit with a fee.

Another thing to think about is overdraft protection. If you make an ATM withdrawal or debit card transaction and there are insufficient funds to cover it, the transaction could still go through, but your bank may charge you a “non-sufficient funds” (NSF) fee.

Conversely, if you don’t opt in and attempt a transaction without this service, your card will most likely be declined. According to a Consumer Financial Protection Bureau (CFPC) analysis, consumers who opt in for this service pay an average of $22 a month in overdraft and NSF charges, while consumers who do not opt in pay an average of $3 a month.

If you’re switching banks because your current one doesn’t offer high savings rates, you might want to consider an online-only bank. Online banks typically feature higher rates than big banks because they have lower overhead, for example, not having brick-and-mortar branches to maintain. Credit unions should also be on your radar, as they often have low fees and high APYs.

Now, you can start shopping for a bank that fits your needs.

Step No. 2: Transfer your money to a new account

So, you now know where you want to open a new account. Transfer your money (well, most of it) to the new account.

How long this takes will depend on your bank. If you use Wells Fargo or Chase, it’s three to five business days.

If you can, try to keep enough money — maybe $200 or so — in your old account to cover any transactions you might have missed. This will safeguard you against “zombie” accounts, which are accounts that get reopened when forgotten pending transactions are processed. This will also help you maintain the minimum balance in your old account if you had that requirement.

Step No. 3: Review and change auto payments and direct deposits

If you previously used direct deposit, make sure to set it up at your new bank. Also, change all your automatic bill payments.

And speaking of automation: Remember to allow all autopay bills and deposits to clear your current account before closing it. If you’re not sure what that includes, go through a year of bank statements. You want to find bills paid through your bank, bills paid via outside companies (such as Netflix and your gym membership) and direct deposits.

Once you’ve identified the automated transactions, go through and cancel them or reroute them to your new bank. It’s worth another reminder to be sure to wait for all transactions to clear.

Step No. 4: Contact the bank to close your account

The process for closing your account will depend on which bank you use. There is one recurring theme, though: You’re probably going to have to either call the bank or visit a branch.

Many big banks don’t allow you to close an account online. For example, if you have an account with Wells Fargo or Chase, you’ll need to submit paperwork online, then call the bank or visit a branch to close your account.

Some of these documents can be quite in-depth. Wells Fargo’s account closure request, for example, is four pages and requires notarization.

The time it takes for an account to close — once all your transactions are clear — can vary, so be sure to check with your bank. At TD Bank, for example, it’ll take two to three business days.

Now is the time that we remind you that this step is a vital one. You might think you can just remove all transactions from an account and leave it open just to avoid the hassle of closing it. That is not a good idea, as some banks and credit unions levy dormant account fees if your account is inactive for a certain period. For example, Santander Bank may charge $16 a month, while Memorial Credit Union charges $2 a month if an account has had no activity for at least 12 months.

Be smart and close the account to avoid this unnecessary charge. After the account is shut, remember to get written documentation of the account closure mailed to you. It’s important to have the closed account documented should any problems arise down the road, such as the zombie accounts we mentioned before.

Step No. 5: Destroy your checks and debit cards

Now that your account is closed, go ahead and destroy all checks and debit cards. Cut up debit cards and use a paper shredder for the checks. Keep bank statements in paper or electronic form for one year after closing the account, then get rid of those, too.

Remember to review any further statements that come to make sure everything is correct.

FAQ: Closing a bank account

Closing your account is not bad as long as you do it properly. Make sure you take into account automatic transactions, minimum balances, bills and more.

Most banks don’t charge a closure fee. However, some do if you’ve only had the account for a short period. If you attempt to close a PNC account within 180 days, you’ll be charged an early termination fee of $25. Meanwhile, BB&T will charge you $25 if you try to close an account within 90 days of opening it. Banks utilize these fees to prevent consumers from trying to take advantage of a sign-up deal and then closing the account when a discount or promotion ends.

Typically, you cannot close a bank account online, but you can close one over the phone. The process for closing a bank account varies by bank.

If you have a joint account, your bank might require you and the other account holder to visit a branch. If it does, be sure to bring a couple forms of identification, such as a driver’s licence and a Social Security card. Online banks will typically require both of you to enter security information to close a joint account.

Once you have completed all the necessary steps and your old account is clear, banks will typically close your account in a few business days. Check with your bank or credit union for its specific timeline.

If you need to close an account because a family member died, the steps you’ll need to take may vary. If you’re a joint member, you’ll typically become the sole holder of the account. If you’re not an owner, you will likely need to provide documentation to close the account, including a death certificate and Social Security number. As always, request confirmation of the account’s closure from the bank.

Any fees mentioned are as of the date of publishing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.