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6 Accounts to Help Increase Your Wealth Thumbnail

6 Accounts to Help Increase Your Wealth

Rizek Housari, CPA, CFP®


Creating a custom financial model of your future gives you the framework and lens to make important financial decisions.

How to best mitigate and manage your tax burden is just one of the important decisions to consider.

At Divergent Wealth we are state-of-the-art financial planners and investment professionals who specialize in simplifying complicated things.

To create a complimentary customized financial plan, call us at 385-CFP-4000. For information, visit us at www.divergentwealth.com.


There are numerous resources available to help you feel confident about your financial situation. Understanding these options is key to making smart choices with your assets. Money management can be exhausting but learning where and how your money can work could make all the difference. Taking the time to consider your options for investing in the future will pay dividends as you consistently pay yourself first.

The foundation of saving is to make sure you get a cut of the money that you make. Bills, groceries, living expenses and medical costs seem to scream louder for your earned money than your nest egg does. Money will escape from you if you do not put it to work. Going out to eat with friends. Picking up a new jacket at the mall. Buying that new phone case online. These events can erode your ability to achieve financial independence and save for the future. 

Your money will flow out of your wallet unless you pay yourself first and save a portion each month. The more you save, the more fun and exciting opportunities will come your way. 

1. Savings Account

2. Brokerage Account

3. Retirement Account

4. Health Savings Account

5. 529 Savings Plan

6. UTMA/UGMA Account

Savings Account

You have paid yourself first. Excellent. That is the hardest part for many. Now you get to decide where to keep your hard-earned money. While keeping it under your mattress or in your sock drawer is easy to get to, there are some better options to consider. Setting up a savings account at a bank or credit union can be a good option. At least your money can earn interest for you. 

Online banks tend to pay a higher interest rate than physical banks do. Like many of us, banks must pay rent too and it does not come cheap. Online banks can often avoid a number of those costs and pass some of the savings on to you in the form of lower fees and higher interest rates. 

Make sure to avoid banks that charge you exorbitant fees. Nobody has time for that.

Brokerage Account

While putting money in the bank for short-term needs can be a good option, investing money for the long term is where the action happens. You can invest in companies like Apple or Amazon through a brokerage account. This account lets you put money to work. Investments such as stocks or index funds can be held in this account. Whenever you need the money, you can sell the investment for cash and typically transfer it to your bank within a few days. 

This account offers the ability to invest with the least number of restrictions when compared with other retirement accounts. However, the downside is that when your investments generate income it is immediately taxable. Retirement accounts allow you to defer the tax or contribute after-tax to take advantage of tax planning in an efficient and effective manner.

Retirement Account

Relaxing by the beach or going on a road trip across the country is the dream. Unfortunately saving your way to retirement is likely not the answer. Saving will likely not be enough on its own. Investing will allow your savings to grow. Investing your money and giving it the opportunity to grow can be a powerful wealth-building strategy. Many employers offer 401k, 403b or other sponsored retirement accounts to help their employees prepare for retirement. In addition, Individual Retirement Accounts (IRA) may be an excellent option giving you flexibility and greater choice in deciding how and when to pay taxes. The decision to make Roth or Traditional contributions should not be taken lightly. The favorable consequences can be enormous and highly beneficial when investors understand the implications of both options.

Health Savings Account

The HSA can be the triple whammy of investing because of the three potential tax benefits. For those with qualifying high deductible health plans, HSAs are fantastic tools to save for medical expenses in the future. To start, contributions to HSAs are tax deductible. Second, if invested, the funds in an HSA are unburdened by taxes. The third tax benefit is that the funds can be withdrawn free of tax if used for qualifying medical costs. 

There is one additional point that may benefit some investors. HSAs may also be seen as traditional retirement accounts, in the sense that if someone later in life realizes that they need access to the funds for expenses that do not qualify, they make take a distribution and pay income tax on the amount withdrawn. This account can be an excellent way to save for the future.

The 529 Savings Plan

529 savings plans can play a critical role in funding your children’s or another beneficiary’s future. For example, these plans allow you to make contributions with after-tax dollars. These funds can then be invested. A great perk of this plan is that your college savings can potentially grow free from state and federal income tax. If the funds are then used for expenses such as tuition, room and board, and fees, then the money is not taxable. What a great perk. With the SECURE act, 529 benefits increased. 529 plans are now allowing funds to be used for registered apprentice program expenses and to pay down student loans. Some states also offer tax deductions or credits to those who participate by contributing to these plans. The option to use prepaid tuition plans also exist and are offered by a few states and higher learning institutions. 


The Uniform Transfer to Minors Act allows adults to invest money for the benefit of a minor. These accounts allow minors to receive certain assets up to $15,000 per year, helping the donor to avoid becoming subject to gift tax. Depending on the state, typically the child cannot receive access to the funds until 18 or 21. This account is not a retirement account but can be thought of as a taxable brokerage account. This means the money can be used for anything the minor wants once they reach the age of majority. Many find this account to be a great way to help children fund a down payment on a home or wedding.

The contributions to the account are an irrevocable gift to the minor and the custodian is responsible for investing the funds or making sure the assets are used for the minor’s benefit. This can be beneficial because it avoids setting up a trust, which can be expensive. A downside is that these UTMA/UGMA brokerage accounts are assets owned by the minor and can impact financial aid eligibility during college when applying for FAFSA.


There are several considerations to make when developing your financial plan. Some accounts may not be wise for every family to incorporate in their financial plan. A number of life goals, tax situations, and financial circumstances may impact which accounts you decide to use. For a review and explanation of your accounts and investments, along with an in-depth review of your financial plan, consider contacting us at Divergent Wealth Advisors.

Creating a custom financial model of your future gives you the framework and lens to make important financial decisions. Tax Planning is just one of the important decisions. At DivergentWealth®we are state-of-the-art financial planners and investment professionals who specialize in simplifying complicated things. To create a customized complimentary financial plan, call us at 385-CFP-4000. For information, visit us at www.divergentwealth.com.

The SCT Library’s mission is to cut through the clutter and the spin to deliver financial straight talk -- to simplify complicated things. These short guides will reduce complex topics to their core issues to assist in making the best financial decisions for your family.

DIVERGENTWEALTH® is changing the way people engage with advisors. They are a competent, dedicated, and credentialed financial partner should you ever decide that’s what you need. Experience the difference at www.divergentwealth.com or call to interview us at 385.CFP.4000.

Divergent Wealth Advisors LLC is registered as an investment adviser with the SEC and only transacts business in state where it is property registered or is excluded or exempted from registration requirements. SEC registration in an of itself does not constitute an endorsement of the firm by the commission nor does it indicate that the adviser has attained an adequate level of skill or ability.

The information contained in this material is given for information purposes only, and no statements contained herein shall constitute tax, legal, or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor.

Individual clients should review with their adviser the terms, conditions, and risks involved with specific product or services. Neither the information provided, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.