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Reciprocal Tariffs Actually Make Wealthy Americans Even Richer

Reciprocal tariffs will drive up the cost of most goods, making everyday life more expensive for American households. According to Fitch Ratings, the U.S. tariff rate on all imports has jumped from 2.5% in 2024 to around 22% today. Some research firms estimate the percentage is closer to 30%. As a result, more Americans may start seeking domestically made goods to save money.

While another stock market correction is disappointing, most of us expected one to happen given the lofty valuations. We’ve diversified into hard assets like real estate, which historically holds or even gains value during economic uncertainty. But no matter how much you plan and diversify, making money in a downturn is always a challenge.

However, there’s a short-term silver lining to tariffs: Wealthy Americans and big spenders just got an unexpected boost in the value of their foreign assets.

Let me explain, starting with my own experience, followed by other key examples.

Average tariff rates on U.S. imports over time, and after Trump's reciprocal tariffs on April 2, 2025

Wealthy Americans Benefit The Most From Higher Tariffs

If you follow my 1/10th Rule for car buying, then owning a European car likely means you have a high income. With the average cost of BMWs and Mercedes-Benz vehicles running about $72,000, you’d need to earn at least $720,000 a year to adhere to the rule.

Further, if you follow my House-to-Car Ratio for financial freedom, which suggests your home should be worth at least 30 times the cost of your car, then you’ve likely built a sizable net worth. With this ratio, owning a $72,000 European car implies your house is worth at least $2.16 million— a little over five times the U.S. median home price.

Of course, only a minority of people follow these financial guidelines, even those who are personal finance enthusiasts. But I like to give people the benefit of the doubt: if you own a European car, you likely have a higher net worth than the average person.

Now thanks to Trump’s new 25% auto tariffs, you just found yourself some free money!

My Range Rover Just Increased In Value By $6,000+

After spending another $1,150 on repairs for my 2015 Range Rover Sport in early March 2025—this time due to leaky hoses and a faulty heater manifold—I felt a little conflicted. Over the past three years, I’d already spent about $4,500 on various fixes after it hit 50,000 miles. Do I buy a new car or keep mine for five more years?

Then I had a realization: my 9.5-year-old car may have just increased in value by $6,000 – $10,000 thanks to the newly implemented automobile tariffs on March 27, 2025! It was enough to cover all my repairs and then some.

Now European car dealers will hike up both their new and used car inventory and pass the tariffs onto consumers. In turn, existing European car owners will raise their prices commensurately on the private market if they plan to sell.

The goal of these tariffs is to boost American car sales, yet ironically, shares of General Motors and Ford still fell 5%–10% after the announcement. The market seems to believe that higher costs will dampen overall consumer spending, leading to weaker demand for cars across the board.

European automobile owners in America just got a 25% increaes in value of their cars due to Trump's tariffs — My 2015 Range Rover Sport just got a nice bump in value doing nothing

I bought my Range Rover in December 2016, long before these tariffs were on the table. Now that it’s almost a decade old, I’ve been considering a new vehicle—perhaps a Jeep Grand Cherokee to haul the family to Lake Tahoe.

The Grand Cherokee has always been a dream car of mine since I saw a rich high school classmate drive around in one. With higher foreign car prices, that option is looking even better.

Cars Made In The U.S.A. Ranked In Order Of Percentage Parts

Here’s a chart (zoom in) showing various car manufacturers and models along with the percentage of their content made in the U.S. (or Canada). Unfortunately, I don’t see the Jeep Grand Cherokee anywhere on the list. Instead, the rankings are dominated by vehicles from Tesla, Honda, Toyota, and Hyundai.

This highlights an interesting point: just because a car brand is American doesn’t mean most of its parts are made in America. Conversely, a foreign brand doesn’t necessarily mean the car isn’t primarily manufactured and assembled in the U.S. I was too quick to judge with my Jeep Grand Cherokee! Darn it.

After reviewing the list of cars made in America, for my next car, I’m now considering the Toyota Grand Highlander, Honda CR-V, Honda Accord, Honda Pilot, and Kia Telluride. As for Tesla, they’ll need to update the Model 3 and Model X before I’d even consider them.

Not only do I want my next car to be predominantly made in America, I also want it to be more affordable. After all, cars are the number one personal finance killer.

More Luxury Foreign Goods Are Worth More, Benefiting the Wealthiest

It’s not just luxury European cars appreciating in value due to reciprocal tariffs, many imported luxury goods are now worth significantly more.

Think high-end Swiss watches (Rolex, Patek Philippe), German timepieces (A. Lange & Söhne), French and Italian jewelry (Cartier, Bulgari), and iconic handbags (Hermès, Louis Vuitton, Chanel).

Take the Hermès Birkin bag, for example. Previously priced between $10,000 and $40,000 in the U.S., it now costs an additional $2,000 to $8,000. And who typically owns a Birkin? Mostly affluent women—you’ll spot them strolling through Manhattan’s Upper East Side or San Francisco’s Pacific Heights.

Hermes Birkin bag price going up due to reciprocal tariffs

Or consider the stainless steel Rolex Daytona. At retail, it costs $15,500, but with the 31% reciprocal tariff, its price jumps by $4,805. Meanwhile, the private market value of a stainless steel Daytona hovers around $30,000. With the tariff impact, it’s now effectively worth $9,300 more. And who collects high-end timepieces? Primarily wealthy men with extensive watch collections.

Luxury Homes Are Worth More Too

The definition of a luxury home generally starts at at least $3 million. Now, such homeowners are wealthier too thanks to the tariffs.

Let’s look at custom-built luxury homes with imported materials from Europe and Asia. Materials typically account for 40% to 60% of a luxury home’s cost, including imported stone, custom cabinetry, premium flooring, and high-end smart home technology. If 50% of a $5 million home is made up of imported materials that now cost 25% more, the home’s effective value rises by $625,000 to $5.625 million.

And who can afford a $5 million home? Based on my 30/30/3 home-buying guide, it’s typically a household earning $1.66 million a year or one with a net worth of at least $16.7 million, if using my net worth home-buying guide. I suggest limiting your primary residence to no more than 30% of your net worth.

One of the primary ways insurance companies determine a home’s value is through its replacement cost—the expense required to rebuild it. So, if construction costs are rising, the value of your existing home is increasing as well.

Once again, government policies end up benefiting those at the top.

Reciprocal Tariffs by country - Tariffs help wealth American consumers the most — What’s more surprising to you? The left hand column or the right hand column?

Did the Tariff Hike Help the Wrong People?

Every politician aims to help the largest number of people possible—usually the middle class. The more people you benefit, the more votes you secure. The more votes you secure the more power you can amass.

However, since European cars tend to be more expensive than the average vehicle, this 25% tariff hike has effectively benefited wealthier car owners the most.

Last year, I visited Land Rover and Mercedes-Benz dealerships out of curiosity, and I was shocked at how expensive new models had become. We’re talking $115,000–$180,000 for vehicles similar to mine, which I bought for $58,000 (pre-tax) in 2016. Brand new, my car originally cost about $74,000.

That visit convinced me that there was no way I’d buy a new luxury vehicle at those prices. Instead, I decided to keep maintaining my existing car. I figured spending $1,000 – $2,000 a year fixing my car was far cheaper than spending over $130,000 after tax on a new car.

Should Have Spent A Crazy Amount Of Money On A Car

But now that the 25% foreign auto tariff is in effect, I should have splurged on a $200,000 vehicle! If I had, I could have seen its value jump by up to $50,000—while enjoying a sweet ride in the process.

Too bad my frugality made me miss out on free money. At least my car should run at least five years longer after changing many of its most important parts. Besides, my car only has about 61,500 miles on it.

Alternatively, I could take the $200,000 in cash I didn’t spend on a new foreign automobile and invest it. That’s exactly what I’m doing, buying the stock market dip because I have the cash and cash flow. And if other assets get clobbered, I will be buying them too.

Buying the April 3, 2025 stock market dip after reciprocal tariffs were announced — Bought about $35,000 in stocks post reciprocal tariff stock sell-off. Will buy more as stocks sell off further

The Government Doesn’t Need to Help Owners Of Luxury Goods

After 24% and 23% gains in the S&P 500 in 2023 and 2024, luxury foreign car and goods owners don’t need extra money. Instead, the focus should be on helping Americans who aren’t heavily invested in stocks or real estate—especially those struggling to cover everyday expenses.

According to Bankrate’s 2025 survey, 59% of Americans don’t have enough savings to cover an unexpected $1,000 emergency expense. That’s pretty bad, if true.

“We are essentially a paycheck-to-paycheck nation,” said Mark Hamrick, Bankrate’s senior economic analyst. “Despite low unemployment and steady growth, fewer Americans have a financial safety net for inevitable unexpected expenses. This is one of the consequences of elevated prices stemming from inflation.”

Our government should find a way to help these folks living on a tight budget, not folks with enough passive income to retire early.

A Tariff Is A Regressive Tax

Unfortunately, tariffs function as a regressive tax, disproportionately squeezing lower-income families. Since they spend a larger share of their income on essential goods, they feel the impact of rising costs far more than wealthier households. Remember, the average saving rate in America is only around 5%.

On the other hand, if you’re able to save 50%–80% of your income, higher tariffs have little effect on your lifestyle or budget. The wealthier you are, the easier it is to absorb these added costs.

Share of spending by income group, how wealth European car owners in America just got richer thanks to the auto tariffs

The Government Loves to Help the Wealthy More

This latest example of a free financial boost from the government is yet another reason to strive for top 1% wealth. While politicians claim they want to help the middle class and poor, their actions tell a different story.

Here are just a few ways the government favors the wealthy:

Multi-millionaires can qualify for healthcare subsidies because assets aren’t checked and income can be manipulated lower
The estate tax exemption is now $13.99 million per person (2025)
Top 1% income earners can still exclude $250,000 / $500,000 in gains from selling their primary residence
The carried interest loophole allows private equity, venture capital, and hedge fund managers to pay a lower tax rate on a significant portion of their earnings. Instead of being taxed as ordinary income (up to 37%), their share of fund profits is taxed at the much lower long-term capital gains rate (15%-20%).
Upcoming tax cuts for top income earners
Upcoming deregulation to help business owners and shareholders

Why do politicians keep helping the rich get richer? Because their biggest donors are the wealthy and powerful. And let’s not forget—most politicians themselves are far wealthier than the average American. Naturally, they’ll protect their own best interests first.

So unless we start electing more everyday Americans instead of millionaires and billionaires, the government will continue designing policies that benefit the wealthy the most.

The top 1% of U.S. earners now have more wealth than the middle class

What I Plan to Do with My Newfound Wealth

If the government suddenly handed you a $6,000 check for free, how would you spend it? This is the type of question economists ask when considering economic stimulus policies.

Unfortunately for the economy, they gave me the stimulus, and here’s what I plan to do with it: nothing.

I won’t spend this $6,000 windfall on a new car—because new car prices are insane. I won’t splurge on designer clothes or shoes that clutter my closet. Nor will I upgrade our Economy seats to first class on our trip to Honolulu this summer. And we certainly won’t be eating more poké and shaved ice than we already planned.

Instead, I’ll save the $6,000 for a rainy day. Something on my 10-year-old car will inevitably break again, and I’d rather be financially prepared than caught off guard.

And because I’m saving the money rather than spending it, I won’t be doing my part to stimulate the economy. Sorry!

For government stimulus and protectionist measures to be effective, they need to be directed at the right demographic.

“But guys, we don’t even trade with your country”

“Shut the fuck up penguin. Did you even say thank you? We’re tired of you taking advantage of hard working American patriots” pic.twitter.com/FLi1B1k8rH

— litquidity (@litcapital) April 3, 2025

After imposing a tariff on Heard and McDonald Islands, which are only inhabited by penguins

Saving Money Is the Default Move During Times of Uncertainty

When uncertainty looms, people naturally tighten their wallets. The larger your savings balance, the more secure you’ll feel in weathering any financial storm. Unfortunately for businesses, higher consumer savings mean lower profits. And with lower profits come declining company valuations. Bad news for investors.

Raising prices on goods and services during an economic slowdown is a risky move, one that could push the U.S. into stagflation. To adapt, I’m cutting back on all unnecessary spending until the dust settles. Frankly, I already have more than enough stuff to keep my house cluttered for a while.

While I appreciate the unexpected boost to my net worth thanks to automobile tariffs, the sting of losing magnitudes more in stock market wealth dampens the excitement. The government may succeed in slowing the relentless rise in the cost of eggs and other goods, but at what cost to the broader economy?

I’m taking advantage of this tariff-induced sell-off to invest in my kids’ UTMA, Roth IRA, and 529 plan accounts. With any luck, they’ll look back in 10 years and appreciate these moves!

For those of you who own foreign luxury goods, are you surprised by the sudden jump in the value of your belongings? More importantly, what do you plan to do with this newfound wealth? At the same time, how much economic pain are we willing to endure to lower the cost of goods and services and make American industries more competitive?

Suggestions To Build More Wealth

Stay on top of your finances by using Empower, a great wealth management tool I’ve used and trusted since 2012. Empower goes beyond basic budgeting, offering insights into investment fees and retirement planning. Best of all, it’s completely free.

if you want to build more wealth than 93% of Americans while securing your financial future, grab a copy of Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of finance experience into a guide designed to help you achieve financial freedom and gain the confidence to live life on your terms.

Join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009.

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The Most Common Tax Planning Mistakes For High Earners

If my posts on the mistake of chasing value stocks or the need to invest big money to make life-changing money don’t resonate, consider hiring a financial professional to manage your portfolio. You may not be obsessed enough to consistently invest the amount needed to retire comfortably. Offloading the burden of investing frees up your time and energy to focus on work, family, and hobbies.

At this moment, I’m preparing to do my taxes again. Every year I file an extension (Oct 15 deadline) because of delayed K-1s from private fund investments. So when Empower reached out about highlighting tax planning mistakes for high earners, I agreed. It’s a topic I know all too well.

What I didn’t realize is that Empower offers tax planning as part of its standard client service. No extra invoices, no $300/hour CPA bills. Just integrated advice, included in the management fee. Considering that taxes are often the single largest expense for high-income earners, having proactive strategy baked in is a big deal.

The Importance Of Tax Planning For High Income Earners

When you’re a high earner—think $250,000+ income or the potential to get there—you’ve probably got a lot on your plate: investments, real estate, maybe a business or two. What you might not be paying enough attention to? Tax planning.

It’s not sexy like a moonshot AI stock, but the compounding effect of smart, consistent tax moves can rival investment returns over time. As Empower Personal Wealth specialist Scott Hipp, CPA, CFP® explains, for high-income, high-net-worth clients, tax planning isn’t about chasing one-off loopholes, it’s about proactive, coordinated, year-round strategy.

Let’s dive into four key questions Scott answered that reveal just how much value smart tax planning can deliver. If you’re searching for a financial professional to manage your wealth, choosing one that integrates tax planning into their service is essential, not an add-on.

Empower has been a long-time affiliate partner of Financial Samurai, and I personally consulted for Personal Capital (later acquired by Empower) from 2013 to 2015. I’ve seen firsthand how incorporating tax strategy into wealth management can meaningfully boost long-term returns.

1. Why is tax planning critical for high earners?

When you’re in the top federal tax brackets—32%, 35%, or 37%—every strategic move counts more. Saving 1% on taxes for someone making $100K is nice. Saving 1% for someone making $800,000? That’s four first-class tickets to Hawaii with a couple thousand left over.

Scott says most people think of tax planning as a once-a-year scramble or a hunt for magical loopholes (“I heard Uncle Bob pays zero taxes because he made his dogs employees…”). The truth: the biggest gains come from small, consistent, legal moves year after year.

It’s like The Shawshank Redemption: pressure and time. Maxing out a health savings account, backdoor Roth contributions, charitable “bunching,” and tax-loss harvesting may seem minor in isolation, but over 20 years, they can carve a serious tunnel toward financial freedom.

Here’s the danger: by the time you file in April, most opportunities are gone. If you’re filing 2025’s taxes in April 2026, your deadline for most strategies was December 31, 2025. That’s why Empower’s team works year-round—advisors and tax specialists meet regularly to tweak and optimize before the clock runs out.

2. What’s the deal with the SALT deduction changes?

The State and Local Tax (SALT) deduction cap got a temporary boost after the passage of The One Big Beautiful Bill Act on July 4, 2025. It’s $40,000 in 2025 (up from $10,000), rising slightly each year until 2029, before reverting in 2030.

Who benefits? Mostly taxpayers with AGI under $500K in high-tax states. Hit $600K AGI, and the expanded cap phases out completely.

But even high earners over $600K aren’t out of luck—if you own a pass-through business (S-corp, partnership, LLC taxed as such), you might use the Pass-Through Entity Tax (PTET) workaround. Here, the business pays state taxes, making them fully deductible federally, and you get a state tax credit. As of 2025, 35+ states have a PTET option.

For the right clients, SALT changes + PTET can unlock deductions worth tens of thousands—money that stays in your portfolio instead of the IRS’s coffers.

3. How does Empower approach complex high-earner situations?

Let’s say you’re a business owner with significant investment income, passive rental income, and real estate holdings.

With Empower, you basically have a “tax specialist on demand” baked into your fee – no surprise bills. The process starts with:

Reviewing the past three years of returns for missed opportunities. (You’ve got three years to amend and claim a refund.) Empower can spot thousands in overlooked deductions.
Holistic planning based on your goals. Tax strategy isn’t in a vacuum—it’s tied to your investment plan, estate goals, and cash flow needs.

Common missed opportunities for self-employed clients:

Not deducting health insurance premiums.
Missing the Qualified Business Income (QBI) deduction.
Ignoring home office deductions.

More common errors Empower can help catch:

Capital loss carryforwards lost when switching preparers/software
Incorrect Backdoor Roth processing
Missed Foreign Tax Credit
Wrong cost basis for stock sales (ESPP, options)
HSA distributions taxed in error

From there, Empower looks forward—maybe setting up a solo 401(k), timing income, or planning capital gains. The idea is to create an ongoing tax playbook, not just fix past mistakes.

4. What real-world tax savings have clients seen?

Missed health insurance deductions are surprisingly common—and costly.

S-Corp owner: CPA added health insurance premiums to W-2 wages (correctly) but never told the client they could deduct those premiums above the line. Amending three years’ returns saved ~$6,000 in federal taxes.
Sole proprietor: Deducted health insurance as a Schedule A itemized deduction, but couldn’t benefit due to medical expense thresholds and not itemizing at all. Amending saved ~$7,500.
Medicare premiums: Many don’t know they qualify as self-employed health insurance deductions. Catching this can save $1,000+ per year.

These aren’t flashy hedge-fund-like wins—but they’re guaranteed returns via tax savings, often compounding over years.

Key Strategies Empower Uses for High Earners

Scott shared a few proactive moves that come up again and again:

Bunching Charitable Contributions

Standard deduction in 2025: $15,750 (single) / $31,500 (married). By combining two or more years of donations into one tax year, you can exceed the standard deduction, itemize that year, and take the standard deduction the next—resulting in a bigger total deduction over time.

Bonus: Donate appreciated assets or use a Donor-Advised Fund for even more efficiency.

Tax Loss Harvesting

Selling investments at a loss to offset gains elsewhere—then reinvesting in similar (but not “substantially identical”) assets—can lower your current-year tax bill while keeping your portfolio allocated. All Empower Personal Strategy clients ($100K+) minimize your tax burden with proactive application of tax-loss harvesting and tax location.

Roth Conversions

Moving funds from a traditional IRA to a Roth IRA lets you lock in today’s tax rate if you expect to be in a higher bracket later. Future withdrawals? Tax-free. This is especially powerful in lower-income years before RMDs kick in.

Saving Money On A Good CPA

A good CPA might charge $150–$400/hour just for tax consultations. Meanwhile, many don’t offer proactive planning at all, focusing instead on compliance and filing.

Empower builds tax planning into its overall wealth management service for clients with $100K+ in investable assets. That means:

One fee, one integrated plan.
Advisors and tax specialists in the same room (or Zoom) all year.
Proactive calls before the deadlines—not “we’ll see you next April.”

The Bottom Line

Big investment wins get the headlines, but year after year, quiet, boring, proactive tax moves can be worth just as much, sometimes more. For high earners, ignoring tax planning is like leaving compounding on the table.

If you’ve got $100K+ in investable assets, Empower is offering Financial Samurai readers a free consultation. Even if you’re confident in your current plan, a second opinion could uncover thousands in missed opportunities.

For a limited time only, book your free, no obligation session here. An Empower professional will review your investments and net worth, and offer some suggestions on where you can optimize, all for free.

Empower’s Tax Optimization Services

Tax optimized investing (tax loss harvesting, tax location, tax efficiency): available to clients investing $100K+.

Tax planning guidance (analysis and recommendations – identify gaps and opportunities in your tax strategy before you file with your advisor and tax specialist): available to $250K+.

At $1M+, clients receive the above, in addition to access to a CPA, at no additional cost.

Disclosure: This statement is provided by Kansei Incorporated (“Promoter”), which has a referral agreement with Empower Advisory Group, LLC (“EAG”). Learn more here.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is the leading independently-owned personal finance site today, established in 2009.

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How To Eliminate That Intense Financial FOMO You’re Feeling

Back in 2012, I thought I had finally conquered financial FOMO after walking away from a well-paying finance job. But after having children, I’ve noticed more and more relapses. If you’ve found yourself battling the desire for more money than you truly need, this post is for you.

Ever since returning to San Francisco from our 36-day trip to Honolulu, I’ve been feeling a greater sense of FOMO. The first week back hit especially hard when Figma IPOed and surged 333% on its first day. Suddenly, we were right back to frenzied markets, with retail investors piling in at sky-high prices.

In Honolulu, my focus was on mainly three things: 1) family, 2) exercise, and 3) remodeling my parents’ in-law unit. Those three priorities consumed all my bandwidth. Between supercommuting and construction, I was spent most days, with little time left to think about chasing investments.

Pickleball and then the beach were my escape. While waiting for the next game, conversations revolved around recapping rallies, kids, or which store sold the best Pirie mangoes. Careers and investments never came up, except when I asked a couple players about Honolulu’s cost of living. The vibe was refreshingly present, grounded, and calm.

The Return Back Was Somewhat Jolting

I had never taken my family on such a long trip before, so the contrast with life back home was especially clear.

With just the four of us at home, family logistics became simpler, familiar camps smoothed out childcare every other week, and the remodeling burden was finally lifted. With all that mental headspace freed up, my mind inevitably drifted back to the markets and to the unsettling realization that the AI boom was racing ahead without me.

On the pickleball courts here, the chatter couldn’t have been more different. Nearly everyone was talking about tech stocks, the bull market, and the next big AI play. Why? Because nearly everyone either works in tech or invests heavily in it. There was no escaping the mania. I found myself longing for the calmer rhythm of Honolulu again.

The Moment That Reduced My FOMO Tremendously

Then something unexpected happened that broke my financial FOMO fever. The first weekend back home, I went to a neighborhood gathering at a local park. Familiar faces were everywhere, including one dad I occasionally hang out with. He works in venture, so I asked whether he ever felt the same financial FOMO I’d been struggling with since returning.

He shrugged. “Kinda, but not really.” Why would he? He spends his days looking for the next big winner, so opportunities are always flowing across his desk. Though he did mention once passing on a company that went on to be a huge success.

That surprised me. If anyone should feel FOMO, it’s investors who had the chance and said no, far worse than never getting a look at all, which is the reality for most of us. If I never had the opportunity, then there was no missing out in the first place. But it also made sense he didn’t feel much financial FOMO since he was already immersed in the hunt for more.

We kept chatting. He asked how my summer had been, so I shared some stories from our time away. Naturally, I asked about his summer too, expecting to hear about some big trip since his family had traveled a lot before. But instead, he told me they hadn’t gone anywhere. He’d been too busy working. Two months into summer, and he was still grinding away.

That was my “ah hah” moment. Suddenly, my financial FOMO evaporated. Here was someone, at least twice as wealthy as me, stuck at home because of work. It reminded me of my banking days, when I had to ask for permission to take vacation—like a kid asking his parents for pocket money. What a crock!

I’m sure his hard work this summer will make him millions more. But he’s already rich. At our age, I don’t want to sacrifice too much time with my kids for incremental wealth that won’t materially change our lifestyle. 18 summers isn’t a lot. I’ve got enough passive income to cover our family’s basic needs. That freedom, I was reminded, is worth more than chasing the next big score.

The Six Steps To Reducing Your Intense FOMO

Financial FOMO comes from comparison, insecurity about our own progress, and the fear of missing a once-in-a-lifetime opportunity. It tends to peak during bull markets, when it feels like everyone else is getting rich except you.

I’m not sure anybody is truly immune to financial FOMO. You can be wealthy, financially independent, retired, or even work in venture capital, and still feel it. But FOMO left unchecked can push you into bad investment decisions, such as buying at peaks, overextending on margin, or constantly second-guessing yourself.

Here are six tactical yet practical steps that may help you manage FOMO better:

1) Build a Core Portfolio You Rarely Touch

One of the best ways to combat FOMO is to remind yourself that you already own a piece of the future. If you’re invested in equities, real estate, Bitcoin, or venture, you’re covered. Even holding something as simple as the S&P 500 means you’re participating in the ongoing growth of our economy. The exact mix of your asset allocation is up to you. What matters most is having a stake in assets that can carry you forward, so you don’t feel pressured to chase every hot new opportunity.

I keep the bulk of my public equity investments in broad index funds. Meanwhile, about 40% of my net worth in real estate, and 15% in private companies.With a solid core, it becomes much easier to tune out the noise and ignore the hype cycles.

For example, if AI truly sparks a wave of IPOs, new startups, and thousands of newly minted millionaires, at least my San Francisco real estate should benefit. I recently experienced a rental bidding war for one of my properties and that’s before the AI IPO wave has even arrived. Investing in the picks and shovels helps ensure you will financially benefit, no matter what.

2) Allocate a “FOMO Fund”

Instead of trying to suppress the urge to participate, give yourself permission, but with guardrails. Roughly 40% of my public equities are in individual growth names, mostly tech. This way, when I see headlines about breakthroughs, like quantum computing, I feel like I’m part of the story rather than left on the sidelines. Of course, during the next correction, I will also lose more than the average index fund investor too.

I’ve also carved out a dedicated “FOMO Fund”—about 5% of my overall portfolio—for speculative money. That’s where I can dabble in individual private companies, new venture funds, or even short-term trends. If it pays off, great. If not, it won’t derail my financial plan. By containing the risk, you scratch the itch while protecting your long-term wealth.

3) Systematize Your Investing With Automation

One reason FOMO hits so hard is because investing often feels optional and emotional. A simple antidote: automation. Dollar-cost averaging into index funds, ETFs, individual stocks, or funds removes the decision-making stress. When money flows into the market on a schedule, you don’t sit around debating whether to chase the next hot stock. Instead, you’re already steadily invested, no matter what the headlines say.

For example, after opening a new personal Innovation Fund account earmarked for my kids with $26,000 ($500 bonus if you invest over $25,000), I enrolled in auto-invest at $2,500 a month. It’s enough out of my cash flow to feel involved without feeling strain. One year later, that’s $30,000 invested; after 10 years, $300,000.

Without automation, it’s easy to fall off track because life gets busy. I have over 30 investment accounts to manage between the four of us. Inevitably, I’m going to miss something, which is why automation is so important to free up mental bandwidth.

I’m concerned my kids may have little chance of becoming financially independent on their own in an AI-driven, hyper-competitive world. Therefore, every dollar I automate for them helps reduce that concern, while ensuring their money is working even if I get distracted.

Make investment contributions automatic through monthly auto-investing to help you reduce financial FOMO

4) Use Opportunity Cost as a Filter

Before jumping on the next hot idea, I try to ask: What am I giving up if I do this? Am I sacrificing cash flow, peace of mind, or time with family? Am I risking capital I’ll need in five years for housing, education, or flexibility? During bear markets, I certainly get a little more moody. By forcing yourself to weigh trade-offs, you realize some FOMO-driven decisions don’t actually pass the test. I

As someone who enjoys investing more than spending, this opportunity cost exercise often flips for me. I tend to think instead: What is the opportunity cost of spending money on something I don’t really need versus the potential returns if I invested it? Buying this unnecessary $120,000 Range Rover could turn into $300,000 in five years if invested well!

Still, the reality is that not all investments work out, especially the most speculative ones. Corrections and bear markets are a natural part of investing. Which is why it’s worth asking a different version of the question too: What are the joys I’m giving up today in exchange for an investment that may never pan out? That balance helps keep you grounded, whether you lean toward spending or investing.

Losing Money Quickly

Just look at the Figma IPO. I suspect FOMO drove many investors to pile in on day one, paying $100–$133 a share. Fast forward just a few weeks, and the stock is already down about 40% from its peak. I would much rather have spent $25,000 on a memorable family vacation than invested it in Figma and watched $10,000 vanish in two weeks. YOLO!

Chasing hot IPOs at extraordinary valuations is dangerous, so please be careful. Instead, consider investing in these companies before they go IPO so you can sell to investors who experience maximum FOMO.

Always remind yourself that you can and will lose money when it comes to investing in risk assets. Sometimes, this fact is easy to forget during a bull market.

How to reduce financial FOMO and not chase hot IPO stocks like Figma

5) Define “Enough” Clearly

FOMO often creeps in when you don’t have a clear baseline for what success actually means to you. If your target is always a vague “more,” then no matter how much progress you make, someone else will always appear to be ahead – whether it’s their bigger house, higher net worth, or latest hot investment. That mindset makes contentment impossible.

What helps is defining enough. For me, that’s when passive income reliably covers our family’s basic living expenses. Once that box is checked, every dollar beyond is truly optional. I can put it toward growth investments, donate it, or try to spend it guilt-free on experiences.

After I hit a passive income target, I try and shift my mindset back toward an early retirement lifestyle. This means less striving, more enjoying. Anchoring to “enough” quiets the noise, and reminds me that I’ve already got enough.

Once you know your number and can sustain your lifestyle, you realize chasing endlessly isn’t freedom, it’s another form of bondage.

6) Change Your Environment

Finally, FOMO isn’t just about the markets, it’s about the people around you. Living in go-getter cities like San Francisco or New York means you’re constantly surrounded by the most ambitious and competitive people. Many of whom are making big money in tech, finance, or startups. The conversations, the headlines, even the birthday gatherings, it all feeds into a sense that you’re in this constant battle where you’re often falling behind.

One way to dial that back is to physically change your environment. Moving to, or even spending extended time in, a slower-paced city or town gives you space to breathe. Suddenly, not everyone is talking about the latest IPO or AI fundraise. Conversations shift to family, community, or quality of life.

It doesn’t mean giving up ambition or opportunity, you can still build wealth anywhere. But by lowering the ambient noise of competition, you reduce the constant comparison game that fuels financial FOMO.

Final Thoughts On Getting Rid Of FOMO

Markets will always swing from euphoria to despair, and there will always be someone making more money than you. But with a sound core portfolio, a small space to take punts, and a clear definition of enough, you can stay disciplined while still scratching the investing itch.

FOMO doesn’t disappear, but with the right systems, it can be managed so it doesn’t manage you.

Readers, do you experience financial FOMO? If not, how do you manage it so you don’t feel like you’re constantly missing out on financial gains? Interestingly, the vast majority of people I speak with in real life say they don’t really struggle with financial FOMO. That makes me curious — what strategies do you use to tame this beast?

Invest in AI So You Don’t Get Left Behind

AI is set to disrupt the labor market in a massive way, for you and for your kids. One way to hedge against that disruption is to invest in AI itself.

With Fundrise’s venture capital product, you can gain exposure to leading private AI companies like OpenAI, Anthropic, Databricks, Anduril, and more. The minimum investment is just $10, and new accounts currently get a $100–$200 bonus.

I recently opened a new account for my children with $26,000 and will auto-invest $2,500 a month for the foreseeable future. My hope is that by riding the AI wave, they’ll benefit from the very disruption that might otherwise work against them.

Fundrise is a long-time sponsor of Financial Samurai, and Financial Samurai is an investor in Fundrise products. Our investment philosophies are aligned. Overall, I’ve invested more than $350,000 in Fundrise Venture.

Fundrise Innovation Fund Financial Samurai investment amount and dashboard - Overcoming FOMO in AI by investing in AI — My current Fundrise Venture investment dashboard, excluding the $26,000 I recently invested for my children

Pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of financial experience to help you build more wealth than 94% of the population and break free sooner. When you’re ahead, that FOMO starts to disappear.

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