4 Ways to Help Turn Income Into Wealth
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Build your wealth by incorporating these strategies into your financial plan.

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You’ve worked hard to achieve financial success and build your income, but do you know how to build your wealth? Try this exercise: Add up the total financial value of all your assets (your wealth), then subtract the total amount of your debt. The result is your net worth. The bigger that number is, the more financial resources you have available. That’s why making the transition from high earner to wealth builder is so important.  

Wealth isn’t just the money the very rich spend on mansions and yachts. It’s the way your long-term financial goals become possible to achieve. Those goals may include saving enough money to last through retirement, becoming financially independent, passing something on to the next generation, or giving back to your community. 

The key to help you build wealth is to incorporate these four strategies into your financial plan.


Increase Your Savings

Finding ways to keep more of what you earn is an essential step toward making the transition from high earner to wealth builder. Here’s how:

  • Tackle your debt, including credit card accounts and student loans.
  • Track your expenses and look for ways to cut out unnecessary spending and how to save for the things you need and want.
  • Allocate the extra money from cutting your debt and spending to saving and investing.
  • Calculate how much you will need in retirement so you can set a savings target (see calculator further down on this page).
  • Increase your retirement plan contributions, including making catch-up contributions if you are 50 or older 1.

Diversify Your Investments

We all have varying levels of confidence when it comes to investing. Your personality, investing experience, risk tolerance, family history and other factors can affect your comfort level.

Wherever you’re starting from, these investment strategies are essential for building wealth:

  • Diversify your portfolio by putting your money in a variety of investment types to hedge against one or more of them having a slump at any given time.
  • Pick the right mix of investments at the right time. Generally, the younger you are, the more money you can put in riskier investments because you have more time to recover from downturns.
  • Invest in more than your retirement account once you’ve maxed out your retirement plan contributions.
  • Include investments that provide equity and cash flow, which can include your own home as well as rental property.

Work Toward Creating Generational Wealth

If one of your goals is to pass on some assets to the next generation of your family, you need to make plans for how your money is spent now and after you pass away. Those steps can include:

  • Creating an estate plan, which is the most common way to transfer generational wealth. Work with an estate attorney to make sure your will and other key estate planning documents are in order.
  • Owning a home, as it will likely be the most valuable asset you have to pass on to your heirs.
  • Having life insurance, which can be another important option to pass along some of your wealth to family members.
  • Owning an annuity, which includes beneficiary benefits that can help you control how and when assets are distributed and help your loved ones avoid the complicated probate process.

You also can share some of your wealth while you’re still living. This can take several forms (in each case, be aware of restrictions and the tax implications):

  • Gift money to a family member to help out with a down payment on a home or provide startup funding for a business, for example.
  • Provide educational assistance by creating a savings fund for a grandchild’s college education or making a tuition payment directly to their school.
  • Pay for medical expenses for a family member directly to a health care provider.
  • Own a family business that you can pass on to the next generation.

Learn Wealth-Building Tips from Financial Pros

Consult with a financial professional. They can help you navigate some of the more complex portions of your wealth-building strategy and keep you from veering off track.

Reading books and taking courses in subjects like investing and entrepreneurship are additional ways to boost your wealth-creating savvy.

Even when your work pays well, you can’t rely on your income alone to generate wealth. Building the wealth you need to fund your long-term goals requires smart planning about how to strategically save and spend your money.


1 The 50+ catch-up contribution is available under Internal Revenue Code (IRC) Section 414(v) for individuals at least 50 years old in 2021 and who make eligible contributions to 401(k), 403(b), and/or governmental 457 plans.

In order to sell life insurance, a financial professional must be a properly licensed and appointed life insurance producer.

The above is provided for informational purposes only and should not be construed as investment, tax, or legal advice. Information is based on current laws, which are subject to change at any time. You should consult with your accounting or tax professional for guidance regarding your specific financial situation.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.

Pacific Life’s Home Office is located in Newport Beach, CA.


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