Wealth Management Tips

Aug 9, 2021 | Insights

Every person faces unique situations when it comes to money, and high net worth individuals are no different. In fact, the more wealth you have, the more complex questions you may have. Whether you hire a wealth manager or decide to do it all on your own, there are a few things that you will want to consider. Here are a few tips that will help get you going in the right direction when it comes to wealth management.

Know Your Money Priorities

Everyone has different priorities when it comes to money, and those priorities will shape your plan. Are you a spender or a saver? Is your goal to grow your money as much as possible, or is preserving what you have of utmost importance? Is philanthropy of high importance? Answers to questions like these can be helpful as you put in place a financial plan. The plan should reflect your priorities, so think through what is most important to you.

If you are working with a wealth manager, you can make a list of your top three money priorities. Compare these to a list of common priorities from your wealth manager and confirm your priorities. Priorities can change over time, and if they do, the plan will need to change with them.

Have A Plan

This seems obvious, but it is often the toughest hurdle for people to overcome. Once you know what your money priorities are, you need a plan to achieve them. The adage “If you fail to plan, you plan to fail,” is not necessarily true. But if you fail to plan, it is harder to determine if you are headed in the right direction.

Creating a plan is not something that should be done without a lot of thought. Sometimes, a bad plan is worse than no plan at all. You can spend time and money advancing towards a goal that is not that important to you. But once a good plan is in place, it is important to monitor it to make sure that it remains current and is still advancing towards your goals.

A Strategic Approach to Wealth Management

Plan For Emergencies

Even the best laid plans can get derailed if an emergency occurs, which is why the best plans will make contingencies in case of an emergency. Insurance is probably the best-known method of planning for an emergency, but there are other steps to take as well.

Having liquid assets available is crucial so that your entire plan does not have to be scrapped if an unforeseen disaster occurs. Hopefully, you will never have to resort to Plan B, but if you do, you want to make sure that you have resources readily available to get you through a rough period, then be able to get back on track to Plan A.

Keep Track of Your Net Worth and Investments

How do you know whether you are making progress towards your wealth management goals? One tangible way to monitor your progress is to keep track of your net worth and your investments. Take a longer view of things and do not get too bogged down in day-to-day swings (paying too much attention to the short-term can cause you to make emotional, rather than reasoned, decisions).

There will be times when your investments might be doing better or worse than you had planned for, and you may need to adjust your expectations or your investments accordingly. In an ideal world, everything would go better than you projected, but results are not always ideal. When things are not going as well as had been forecasted, it is important to not let things get too far off track before making necessary adjustments.

Build Your Knowledge

It can be tempting to think that once you have a wealth management plan in place, you have done all the research that you need to do. But whether it is changes to tax laws, new insurance products that are offered, or a changing landscape in the investment world, not keeping abreast of new developments can be costly. Hiring a wealth manager to keep track of those things for you can help provide peace of mind.

If you are going to manage your own wealth, there is a simple maxim to keep in mind: know what you are getting into. Whether you are talking about investing, buying insurance, or any of the other aspects of wealth management you need, take the time to understand what exactly it is you are buying. Taking the time to research and understand things now can help save a lot of hassle (and money) down the road.

Minimize Your Taxes

As you see your net worth increase, you will often find that your tax situation gets more complicated. Having a wealth management strategy that minimizes the taxes you pay is one way to help you achieve your financial goals. You are usually not presented with something as clear-cut as, “Here are two investment vehicles that will produce identical returns, but with one you won’t have to pay any taxes.” Instead, as you make decisions, be aware of the tax consequences for the different options, and plan accordingly.

If managing your own wealth seems like a daunting task, there are people out there who can help you through the process. Wealth managers usually work exclusively with high-net-worth individuals, so they have a specialized understanding of the unique challenges, decisions, and risks of their clientele. Most wealth management firms will be happy to sit down with you for a complimentary initial consultation, and during that time, you can get a better idea of whether a wealth manager is right for you. Whether you decide to do it on your own or hire someone to help you through the process, a wealth management plan should put your priorities first.

A Strategic Approach to Wealth Management