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Youre halfway tobecoming a millionaire!
What do you do now?
Start thinking about thesemoney moves now that youre halfway to joining the millionaire club.
And you oughta update it every one or two years moving forward, as your assets and needs change.
That could be as simple as just updating beneficiaries and putting basic legal protections in place.
At this net worth, you dont necessarily have to hire an attorney, however.
you might probably get away with creating a will using online platforms like LegalZoom or LawDepot.
As your estate grows and becomes more complex, you might always hire an attorney to draft something custom.
But for now, just double-check you have an estate plan and you keep it up to date.
Consider Life Insurance
Not everyone needs life insurance.
But many families do, especially at this level of wealth.
Does your family rely on one primary breadwinner to put food on the table?
If not, consider buying life insurance.
That means the percentage of your portfolio that should be invested indifferent asset classes.
Of your stock portfolio, you aim for 70% U.S. stocks and 30% international stocks.
But those investments dont just stay frozen in carbonite.
Each one rises and falls along with the market.
Rebalancing helps you sell high and buy low.
You periodically sell off investments that are overperforming and buy ones that are underperforming.
If its overweighted in one area and light in another, just buy more of whatevers light.
Get More Strategic With Tax Planning
The more you earn, the more Uncle Sam takes.
Unless you get better at the tax planning game, that is.
Sief Khafagi, co-founder of real estate investment platformTechvestor, emphasizes tax planning at this level.
Once you cross the $500,000 threshold, optimizing your tax strategy becomes critical.
you’re free to also look into usinghealth savings accounts(HSA) as secondary retirement accounts.
Khafagi touched on something worth exploring further: depreciation fromreal estate investments.
For your regular taxable brokerage accounts, consider tax-loss harvesting.
Add Passive Income Streams
No one wants to stay dependent on their employer forever.
At your net worth, youre more than ready to start adding income streams from your investments.
Dr.Cameron Sepahworks with wealthy clients to help them make better behavioral decisions around money.
Start small and explore adding these or other income-producing investments to your portfolio.
Start Thinking About Buying Back Your Time
Most people trade their time for money.
Eventually, you want to reach financial independence, where you might live entirely on passive income.
In the meantime, you’ve got the option to still start buying back your time.
Allow yourself the time to focus your energies elsewhere.
That could start small, by paying a neighbors kid to mow your lawn.
Pay an accountant to prepare your taxes (and offer you tax planning advice).
At a $500,000 net worth, you’re free to start seeing the finish line.
Keep your eye on the prize, and keep evolving your financial acumen to build wealth even faster.
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