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Queen Latifah – worth an estimated $70 million – got this money savings advice from her mom. Pros say more of us should follow it, too: ‘The best part is it scales the more you make.’ 

BEVERLY HILLS, CALIFORNIA – OCTOBER 22: Queen Latifah attends TheGrio Awards 2022 at The Beverly Hilton on October 22, 2022 in Beverly Hills, California. (Photo by JC Olivera/Getty Images)

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With a resume chock full of studio albums, television shows, movies and celebrity spokesperson gigs, Queen Latifah has amassed an estimated net worth of $70 million according to Celebrity Net Worth.

Along the way, she no doubt learned plenty of money lessons, but this may be one of the earlier ones: In a Good Housekeeping magazine story, Queen Latifah said, “My mom has always been my champion. She was very smart and grounded. She said, ‘Save your money. Pay your taxes. Don’t put everything in one basket,’ but she let me explore and be creative.” (Good news on the savings front too: Many high-yield savings accounts are now paying more than they have in a decade: See some of the highest savings account rates you may get now here.)

Pros say there is something to be said for being responsible with your money — by saving and diversifying — while also allowing yourself some freedom to find and pursue your passions, even if they cost money. “The best part is it scales, the more you make, the more you can spend — just learn not to spend more than you make,” says certified financial planner Anthony Ferreira of WealthPointe Wealth Management. 

Basically, pros say it works like this: Once you’ve established a basic financial footing under you, you’ll have a lot more room to “explore and be creative” without risking your financial future. There are three big parts to that financial footing: 1) Build an emergency fund, 2) Save for other goals like buying a home, and 3) Save at least 10-15% of your income for retirement, and invest that savings in a diverse portfolio of stocks and bonds. (Of course, if you have debts you will also be paying those down.)

Emergency fund: What you need to know

You need an emergency fund saved up that contains somewhere between 3-12 months of your essential expenses. This will help you out should you lose your job or have a big unexpected expense. Exactly how much you need depends on several personal financial factors like whether or not you’re single, married, the sole breadwinner, if you have dependents and more. MarketWatch Picks highlighted some important emergency fund savings tips here. See some of the highest savings account rates you may get now here.

Saving for other goals: What you need to know

Beyond emergency savings, you’ll likely want to have some savings for short-term goals like buying a home or taking the family on a much-needed vacation. For those, keep your money somewhere relatively accessible like a high-yield savings account. MarketWatch Picks shared ways to accelerate your savings and how you should plan to save based on your age and your long-term financial goals. 

Diversifying your retirement investments: What you need to know

Save at least 10-15% of your income for retirement, and make sure you’re investing that money smartly. “You minimize your risk by spreading out your investments across various sectors. If one investment flops, you’re protected by another that may perform better. It’s all about balance,” says certified financial planner Bill Nugent at Convey Wealth.

Basically, instead of having all your money in one bucket, experts advise making sure your investments are well-rounded. We’ve asked experts about the top 5 mistakes new investors make and how they can be avoided. Hint: One mistake is chasing hot stocks instead of putting together a diversified portfolio that includes a variety of stocks, bonds and cash.

The advice, recommendations or rankings expressed in this article are those of MarketWatch Picks, and have not been reviewed or endorsed by our commercial partners.

Credit: marketwatch.com

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