Management of wealth requires many moving parts. Balancing multiple homes, ownership stakes in various businesses and investment portfolios can be complex; working with a Certified Financial Planner(r) who can help create and implement an extensive financial plan may be indispensable for success.
Large ultra-high net-worth wealth management firms may find it challenging to offer you personalized attention, so it may be worthwhile seeking out a smaller firm specializing in wealth management for high net worth individuals.
1. Know Your Goals
High-net worth individuals possess more assets than the average person and thus require a different strategy to manage those assets effectively. They should identify their goals and partner with an advisor specializing in wealth management.
Tax optimization strategies, estate planning expertise, philanthropic guidance and investment solutions from an advisor are all services they offer clients to address all aspects of their financial situations. This holistic approach ensures all aspects are considered and addressed appropriately.
Certified Financial Planners(r) can also assist high-net-worth individuals with asset protection. Since high-net-worth individuals often possess significant assets that must be safeguarded from creditors, lawsuits, and other risks, obtaining adequate liability and life insurance should also be considered an option for asset protection.
Communities should create plans for giving back and taking advantage of tax deductions for charitable donations.
2. Create a Budget
An effective wealth management strategy begins with creating a financial plan. This document details both income and expenses.
HNWIs should create a financial plan that takes into account their goals, risk tolerance, investment portfolio and appropriate insurance coverage.
Responsible management of significant assets requires the expertise of experts. Find an advisor who can offer the strategies and guidance to best suit your situation by using WiserAdvisor's free Advisor Match tool to answer a few questions about yourself, then get matched with vetted financial advisors that may be suitable. Plus, schedule a call with them so they can better understand your circumstances and goals!
3. Invest Smartly
Investment strategies are one of the core components of effective wealth management. Although investing can seem intimidating at first, there are various simple approaches you can take to get started. First and foremost is to determine how much money you want to save for long-term goals, followed by choosing a type of account and purchasing investments accordingly.
Once you've chosen the appropriate investments, it is essential that you stick with them. Depending on your financial goals and risk tolerance, rebalancing may be required periodically, by shifting money between asset classes that are doing well to those that may be underperforming - this helps achieve diversification while also helping prevent large losses that might take a while to recover from. Alternatively, hire someone to oversee your investments on your behalf.
4. Manage Your Debts
Debt can often be seen as a negative force; however, it can actually be used as an invaluable asset management tool. Mortgages and other forms of non-consumer debt may allow individuals to purchase real estate that may increase in value over time and build their wealth this way.
Poor debt habits can quickly lead to financial stress. Therefore, it is crucial that wise borrowing decisions be made, and it may be useful to consult a financial professional prior to making any definitive decisions.
Know Your Net Worth (aka "Net Worth Calculation"). A high-net-worth financial advisor can make this process simpler while protecting your assets - plus creating an investment strategy to reach long-term goals.
5. Create a Plan for Retirement
At retirement, you must develop a plan for managing withdrawals from your savings and keeping up with inflation by keeping spending in line with that rate. Inflation can eat away at assets so it's wise to adjust spending according to inflation levels.
Your wealth advisor can also help you figure out how much income is coming in each month from sources like Social Security, pension funds, and investments - and create a strategy to reach your goals while safeguarding savings.
Finance management can be daunting, but with some hard work and guidance from an experienced advisor you can achieve your financial goals. WiserAdvisor makes getting started easy - click to fill out their form and connect with pre-screened advisors!
