Growing wealth isn’t just about making money—it’s about keeping it. The economic landscape of the U.S. is changing quickly, and while opportunities for financial growth are plentiful, so are the traps. Here, we’ll explore the top three wealth killers affecting American households and then dive into three powerful growth strategies to help build and secure your financial future.

Top Three Wealth Killers

1. High-Interest Debt
   The Reality: More than 77% of American households carry some form of debt, and of those, a significant portion is high-interest consumer debt like credit cards and payday loans. With average credit card interest rates hovering around 20%, this debt can quickly snowball, creating a vicious cycle that prevents people from saving, investing, or even planning for retirement.
   The Impact: Debt payments drain resources that could otherwise be invested. For instance, someone paying off a $10,000 debt with a 20% interest rate could lose out on nearly $5,000 in interest payments over three years—a sum that could have instead grown in a high-yield savings or investment account.
2. Lack of Financial Literacy
   The Reality: Only 57% of Americans are financially literate, according to a global survey on financial education. Without a clear understanding of budgeting, investing, and tax strategies, it’s easy to fall prey to costly financial errors. Even simple misunderstandings about interest, compounding, or investment fees can lead to missed opportunities.
   The Impact: Financial illiteracy can create a long-term deficit in wealth accumulation. When people don’t understand how to leverage investment accounts, tax-advantaged savings, or even compound interest, they miss out on the power of growing wealth. According to a National Financial Educators Council study, lack of financial literacy cost U.S. adults over $415 billion in 2022 alone.
3. Income Stagnation and Inflation
   The Reality: Wage growth has lagged behind inflation for decades. While the cost of living rose nearly 7% in 2021alone, the average wage only increased by 4.6%, according to the Bureau of Labor Statistics. This gap has left many households struggling to maintain their purchasing power, let alone save for the future.
   The Impact: When inflation outpaces income, families lose spending power, making it difficult to cover basic expenses and nearly impossible to save or invest. Without strategies to counteract inflation, it’s like rowing against an ever-stronger current—you’re always falling behind.

Top Three Growth Strategies

1. Tax-Efficient Investment Accounts
   The Strategy: Tax-advantaged accounts like 401(k)s, IRAs, and Health Savings Accounts (HSAs) allow individuals to invest pre-tax dollars or enjoy tax-free growth and withdrawals in retirement. Using these accounts reduces taxable income now and maximizes wealth accumulation over time.
   The Impact: Tax-advantaged accounts can amplify your savings power. For instance, investing $5,000 annually into an HSA (which has a triple tax advantage) could lead to nearly $200,000 in 20 years, assuming a 7% average return. This amount is also shielded from taxes, maximizing every dollar’s potential.
2. Automated Savings and Investment Plans
   The Strategy: Automated savings plans, like direct deposit to a high-yield savings account or setting up a fixed investment amount each month, help build wealth effortlessly. With automation, you pay yourself first, treating saving and investing like a mandatory bill rather than an afterthought.
   The Impact: Americans who use automated savings or investment plans are 76% more likely to hit their financial goals. Automation takes willpower out of the equation, helping individuals consistently save and invest. Even saving as little as $200 a month can grow to over $60,000 in 15 years, assuming a modest 5% return.
3. Strategic Use of Debt and Leverage
   The Strategy: While debt can be a wealth killer, it can also be a wealth-building tool when used strategically. Low-interest debt, such as a mortgage or business loan, can be used to acquire appreciating assets or fund ventures with high returns. Debt used wisely, such as borrowing against a home or using a business loan for expansion, can work to grow wealth.
   The Impact: Using low-interest debt to your advantage, like financing a real estate investment or starting a business, can generate income and build equity. Real estate alone has been responsible for 90% of millionaires, partly due to strategic debt use. The key is ensuring returns on the investment exceed the debt costs, amplifying financial growth instead of creating a burden.

The Bottom Line

Achieving financial security doesn’t just happen by earning a high income. It requires an understanding of wealth-killing traps and implementing smart, actionable strategies that work for you. From reducing tax burdens with the right accounts to leveraging automated investments and good debt, taking these steps can help you stay ahead of financial challenges.

These growth strategies not only mitigate risk but also empower you to build a financial foundation that protects against the uncertainties of inflation, income volatility, and more. Remember, wealth isn’t just what you make—it’s what you keep and grow. By being strategic, you can start building a legacy that works for you, not against you.