The 'Silent Killer' Of The Upper Class Is Easily Explained By A Financial Planner

Wealth building is a complicated process. It's not straightforward, and everyone's journey will be unique. Yet, every voyage into the upper class features a few key elements and faces similar challenges. Chad D. Cummings, a CPA and tax attorney at Cummings and Cummings Law, recently told GoBankingRates, "Building real wealth by your 50s requires early and uncomfortable financial discipline." But his most pressing advice centered on a different foe: taxes. Cummings described taxes as "the silent killer of upward mobility," and noted that failing to understand how the tax code operates could be the biggest threat to achieving your financial goals.

Knowing how to thread the needle takes serious commitment and lots of research. This is made even more complicated since tax rules change on a regular basis, sometimes even from year to year. Nevertheless, learning how to legally reduce your tax burden when April rolls around again is a critically important task for those in the upper class and others aspiring to join it. Here's what Cummings suggests savers should do to flip the script and get their finances working for them instead of fighting the current created by taxes on the way to greater riches.

The U.S. tax code is a gigantic tome of information. It's dense and far too expansive for the average consumer to consistently keep track of every change. This is why the wealthiest people in the country frequently employ tax professionals to help them make the most of their deductions. As Cummings noted, "The wealthy do not pay more taxes — they learn not to." The reality is that there are numerous opportunities to write off expenses, add in deductions, and strategically classify certain financial data to make tax law work in your favor. Of course, this doesn't mean that wealthy taxpayers routinely skirt the law and improperly file their taxes. Instead, they understand how to find favorable loopholes that allow for additional savings.

Fortunately, seeking out beneficial tax strategies isn't reserved solely for the ultra-wealthy. Anyone can learn ways to maximize their tax refund or utilize a deferred bonus trick, regardless of their income level or other financial markers. Anything you're able to leverage in pursuit of reduced costs can ultimately make a big difference in keeping more money in your pocket to fund your current lifestyle or build wealth for the future. This is an approach that any kind of earner can get wrong, but one that can make an immediate and significant impact when done right.

Losing growth potential to lax tax preparation strategies can eat away at your wealth from below, but there are other important factors to consider on the top end. According to Cummings, owning equity in a company or property is essential for bolstering your finances. A salaried income launches your financial journey, certainly, but investing in something to grow your wealth is "non-negotiable," according to the tax law professional and financial planner.

For some, this might be an investment in a business, whether as a primary means of supporting your own working aspirations or as a contribution to someone else's venture. Others might want to invest in real estate. Property purchases have a tendency to generate significant wealth over the long term thanks to their flexibility as an asset. Wealthy investors generally have more options available to them, but these avenues for wealth building aren't completely blocked off to middle class — or even working class — consumers. Anyone can invest in the stock market, allowing them to buy into companies they know and trust. Alternatively, even if you don't have the funds to purchase your own flipper home or rental property, Real Estate Investment Trusts can be serious dividend producers that allow any investor to buy into a basket of real estate assets at a low cost of entry.