What to Focus On In Order to Build Wealth in 2025

Due to higher-than-average returns in Q4 2024, financial experts are setting their expectations low. This way, we’ll feel less frustrated the next time some exogenous variable causes stocks to sell off again in Q1 2025.

Unfortunately, they were right.

The Trump/Elon administration rally was short-lived. As of February 26, 2025, Tesla’s stock price is down 20%. Bitcoin is down 8%. How the mighty have fallen. Flanked by increasing federal layoffs and higher energy costs, the average American household is surviving on the razor’s edge. Instead of focusing on stock market returns, I’m focusing on boosting our cash flow. Calculating the income coming in and doing the most with what remains after investing.

Most households make the mistake of planning for the rest of their money after they spend most of it. You have to do the inverse.

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Cash flow Lifestyle Focus

Your cash flow funds your lifestyle. If your lifestyle aspirations are too high, no amount of money will be able to fix your burn rate. Stop increasing your wants to meet your dollars. Slow down. Turns out, you don’t need to spend every dollar you earn to be happy. Avoid the types of friends and peer groups that make you think you need to.

While net worth (wealth) is just an arbitrary vanity metric that changes daily, how you spend your earned income on a daily level carries a bigger impact. At this rate, most households spend nearly 75 cents of every dollar earned on housing, transportation, and food. That’s all before taxes.

Get ahead of yourself because our collective spending is increasing our prices. The federal reserves are keeping rates higher for longer because of this. Inversely that’s a good thing to push us away from credit cards.

Luckily, an aggressive Fed makes increasing passive income easier. The clearest example is through earning 4.12% on an 18-month CD and 4.5%+ on a one-year Treasury bond. This is higher than the long-term average of 2.98%. The best high-yield savings accounts of February 2025 (up to 4.75%). CIT Bank Platinum Savings account is also high yielding at 5.05% for balances $5k+. Check out Bankrate.com for the latest updates.

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What to do in 2025?

The easiest way to make more money is through your day job.

The faster you can get promoted, the more you can get paid. The second easiest way is to spend less money. Take note of the reoccurring expenses that you don’t use. I stopped nearly all my Amazon subscriptions. If it’s convenient, it’s not as free as you think. Pick up your groceries versus the delivery. Also, pick up the pizza, you will find that the price is cheaper when you make the effort.

At the very least, try to hold onto your job. When the good times return, you’ll better be able to benefit. Most people who are laid off wait nearly 11 months for the next job placement. Every month is a death sentence to your savings, investments, and overall mental health.

There will be a bottoming effect. Hopefully, that will come sooner rather than later.