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5 Simple Wealth Management Tips

Written by prositesfinancialMar 27 • 4 minute read

wealth management

We all dream of financial success in some way or another, be it financial independence, retirement, a special car, or a certain lifestyle. Perhaps you’d like to travel and see the world, or just be free from the debt and repayment cycle to spend more time with family, friends, or other loved ones. Many of us think that if we just work hard enough and wait long enough, these dreams will finally come true… someday. However, without an actionable plan combined with determination and self-discipline, dreams are just that – dreams.

Make a Financial Plan

Having a strong financial plan for wealth management is vital to achieving our financial goals in life, but it is often something that gets overlooked as we focus on the tyranny of the urgent. We work every day from paycheck to paycheck, paying our bills, and living our lives, often without giving enough thought to creating and following a sound long-term plan.

What is Personal Wealth Management?

What is wealth management, and why should you care about it? Personal wealth management is taking the correct steps at the right times to make sure you are staying on the path to achieving your financial goals in full and on time. For wealth management to work, it is important to get started with a plan right away and stick with it for the long haul. Procrastination is not your friend when it comes to wealth management.

1. Plan Your Earning and Spending

While it is essential to create and stick to a budget, a budget is not strictly what we are talking about here. The first step to planning your earning is selecting the ideal career field and employment situation that will pay you what you are worth and give you the raw financial means to achieve your goals. Being underpaid by even a small amount, say in the hundreds of dollars per month, can have a very significant effect on your ability to reach your financial goals.

If you are in a position to do so, it can be helpful to negotiate a better salary or more benefits with your employer. If your job isn’t ever going to pay you what you are worth, you might try shopping your resume around to see if you can get a better offer somewhere else.

Once you have established and maximized your income from your primary salary, add to that income any additional income you receive from other sources. Next, determine your most substantial monthly expenses and ensure you are paying only what is necessary for each of those. If you are wasting money on unnecessary costs each month, it will only hurt your ability to reach your financial goals in a timely manner.

2. Save Regularly and Automatically

Next, it is important to spend less than you earn and save regularly. It is often beneficial to save automatically so you will not have to rely on self-discipline and will not be tempted to spend leftover money that is sitting in your checking account each month on impulse purchases.

One popular technique that has worked for many people is to set up an automatic transfer of a designated percentage of each paycheck. This can be set to run every two weeks once every month to a separate high-interest savings account where the money will accumulate over time and can then be invested in various securities.

3. Use Credit Carefully

Credit is a tool that can be useful in achieving specific financial goals. However, it is a tool that comes with potential pitfalls that trap many people. When it comes to debt, it is easy to bite off more than you can chew and end up with balances that will take a very long time to pay off. Don’t be tempted to use debt as a form of instant gratification. Instead, treat it as a strategic tool for achieving key financial goals.

4. Set Realistic Financial Goals  

Remember, achieving your financial goals is a matter of creating a plan and following through. If you try to create multiple simultaneous plans and follow through on all of them at once, you are likely to become stretched too thin and get overwhelmed. This can lead to failing to stick to your financial plan, and in turn, you could watch your financial goals slowly slip away from you over time.

Instead, set one achievable financial goal at a time, and focus on just that one goal. Make a plan that will help you achieve that goal by a specific date and stick to that plan until it is finished. After you accomplish that goal, cross it off and move on to the next one on your list. By focusing your available financial resources on just one goal at a time, you increase your odds of success and allow all of your resources to be focused on that one objective rather than being spread thin across several goals at once.

5. Create and Follow a Retirement Plan

Finally, create and follow a retirement plan. This is the end game of most financial plans – to be able to retire and live comfortably with stability at your desired standard of living for the foreseeable future.

Consider which investments you will need to make to create a stable cash flow month after month, year after year after retirement. Put together a plan to make those investments gradually over time and stick to the program.

Some employers offer their employees retirement plan options. If you are not yet contributing to your employer’s retirement plan, you may wish to consider doing so. Whether or not your employer offers retirement plans, it is essential to find all of your available options and use the best resources available to you. Keep in mind your personal goals, preferences, and desired standard of living when making these decisions. It is important to select a retirement plan that will result in you achieving your desired standard of living at your target retirement date.

Wealth management doesn’t have to be stressful or frightening. The most important thing is to get started as soon as possible and focus on creating and following a plan. If you do these things, you will be off to a great start towards a brighter financial future.

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