By Daniella Rand
You know that your life has more value than the sum total of your bank and investment account balances. But you’re also painfully aware that life is easier and more enjoyable when you don’t have to worry about the dollars-and-cents impact of every single decision you take.
That’s why it’s so important to understand the basic principles of wealth management. No need to enroll in a four-year finance degree program or sit for your Certified Financial Planner certification, mind you — unless you’d like to make a full-time career out of it. Just a basic overview of the what, where, why, and how of money management. You’ll surely be a better saver for it.
We don’t have space here to go over everything you need to know to manage your wealth better. Instead, we’ll zero in on three things you can begin doing today to improve your financial footing.
3 Amazing Tips to Manage Your Wealth Better
Ready? Follow these three amazing tips to manage your wealth better.
1. You Must Spend Less Than You Earn
This is, arguably, the golden rule of personal finance. While there may be short periods of time in which it’s simply not possible to spend less than you earn, your default position should be cash flow positive — in other words, taking in more than you send out. Follow this rule and you’ll be well-positioned for what comes next.
2. You Should Always Take Advantage of Tax-Advantaged Accounts
They exist for a reason: to reduce your net investing costs and help your money grow faster. Pretty much everyone with a steady income should have and contribute to an Individual Retirement Account (IRA). Families with smaller children should have at least one 529 education savings account per beneficiary. And folks who expect to face serious medical expenses in the future should begin contributing to a health savings arrangement as soon as practically possible. If your employer offers a 401(k) and matches contributions, all the better.
3. You Need to Know Where You’re Going, and How You Expect to Get There
You don’t have to be a professional planner to appreciate the importance of long-term goal-setting. Take the time to lay out your life goals and financial priorities, and you’ll find it far easier to make the money moves needed to turn them into reality.
What’s the Secret to Wealth Management Success?
Despite what you might think, this question does not have an easy answer. There’s no single secret to wealth management success, no sound bite that applies across the vast universe of financial situations.
The secrets to wealth management success, such as they are, are situation-specific. What works for you and your family might not work for your neighbor. That’s what makes life — and the wealth management business — so interesting.
With that said, these three tips to manage your wealth better really do have near-universal appeal. Why not try them out today and discover what so many others already know?