When ‘wealth management’ comes up in conversations, all people think of is complicated financial concepts and intricate financial processes. The reality, however, is that wealth management is actually very simple.
Managing your wealth is equally as important as creating that same wealth and anyone can grow and manage wealth by following a few basic tips that will deliver a real boost to their finances.
Here are a few tips to get you started:
Save Regularly and Start Early
An investor’s best friend is time. It gives you the power of compounding interest and other returns timely. Get into the habit of saving and investing even if you start with just a couple of coins a week. The amount you save is less important, it’s the habit that you are creating that is important.
Regular contributions give that compounding effect more to work on. In the long run, the interest and dividends earned on your savings can more than exceed all the contributions you made. There are many apps that can help you save and invest small amounts of money. Find those and get into the habit of saving, even if it’s just 10% of your income.
Get independent Financial Advice
A lot of people shy away from finding professional advice where their money is concerned. They often spend their working life paying into pension pots and insurance policies but then often make the costliest mistake of all by not seeking financial advice to find out which of those plans may work best for them.
It really is important that you ensure that you get the best possible plans to suit your needs by speaking to a knowledgeable, qualified advisor. It is not that hard finding the right professionals for you.
You can start your search in a number of places including asking friends for referrals or asking other professionals; your family accountant or tax preparer for example, or even family members.
Develop a Comprehensive Financial Plan and Financial Vision Board
Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off and when?
How much do you want saved, and by which date? You will need to be clear on the amount of income you would like to spend on yourself but also the type of life you would like and, if applicable, the charities you hope to impact.
You also need motivation to start adopting better money habits, and if you craft a vision board, it can help remind you to stay on track with your financial goals. You may not trust yourself to remember to make any of your payments on time, be it quarterly or periodically.
Make a credit report to aid you in making timely payments. Think about setting appointment reminders for these important payments the same way that you would an annual doctors visit or car service.
Always Avoid Scams
A surprising number of people, including many with good financial awareness, fall victim to a wide range of scams. The losses are sometimes so big that they can wipe out a lifetime of savings.
Take heed to the old rule that, should anything sound too good to be true, it most probably is. So rather than being too brave and going for things that your gut warns you against, know that some risks are not worth the trouble.
Be Credit Wise
Credit isn’t that much of a bad thing. Actually, if you use it to your advantage, it can help you accrue wealth. Only use credit when you know that you can pay on time, be it a car loan or mortgage.
If you are able to use credit wisely and responsibly, it can be advantageous as a key tool in wealth management.
Take a Daily Money Minute
This is from LearnVest Founder and CEO, Alexa von Tobel, who sets aside one minute each morning to check on her financial transactions. She monitors things like her daily spending, investments and any other fees charged on her account.
This 60-second act helps identify problems immediately, keep track of goal progress and sets one’s spending tone for the rest of the day.
Buy, Invest, and Create Assets
Real wealth is generated by owning assets and there are many ways to own them. A lot of people have a mistaken belief that working for a salary means one can’t be wealthy. It only means you need to divert some of your income into buying assets such as stocks, apartment buildings, and bonds.
Your income is the result of trading your time and value for money. Since time is capped, there is a limit on how much you can make. Regardless of how much you make an hour, you must get into the habit of converting your income into assets.
Review your Financial Goals Regularly
Your situation in life may change and your financial plan will also require regular reviewing and change. In order to make sure your goals are still achievable and on target and your income or tax situation, or even personal situation, hasn’t changed, go through your plans and make a few tweaks here and there should any such change take place.