Your Most Valuable Asset

Wealth Management: We have counseled thousands of people regarding their wealth, and the common words associated with those who have obtained financial security tend to be:

• time
• saving
• vision
• goal
• drive
• diligence
• sacrifice
• hard work
• loyalty

That’s to name just a few. We did not include “luck” or “risks” because those two words are almost always commonplace in the “failure” column, with “bad luck” being another clarifier.

If you want to make the most appropriate decisions for yourself, start with your vision. Write down the most important objectives you want to accomplish. Go ahead, they are already in your head, oftentimes distracting you. Once you have them down, then start assigning dollar figures necessary to accomplish each one. In some cases, the cost can be low in terms of money. Not everyone has the same ideas of importance. If you are married, this exercise is extremely important. You may or may not be on the same page with your significant other.

Investment Management: You have now identified your objectives, and you have a monetary figure associated with each one. Now you need to save or reallocate your resources to best support those objectives. Some may be near term and others long term. Don’t get caught up into emotions and investment sales pitches on what appears to be the next “hot” thing. Your short-term objectives may require low-yielding, safe investments. Your longer-term goals can assume more risk because you have time on your side.

Most people, including the wealthy we work with, can’t always satisfy all they desire. Choices have to be made, priorities outlined and certain goals skinnied down or eliminated all together. Be careful not to assume too many risks … if you do and you are wrong, your list of obtainable goals starts to shrink rather quickly.

Wealth Protection (also called Risk Management): A person’s ability to earn a living is immensely valuable. The younger you are and the less you have saved, you really need to purchase as much disability insurance as you can to protect your earnings ability. Once you are retired, your body unfortunately becomes a liability and you need to account for future health and long term care costs. Aging in this society is mighty expensive.

Tax Management: We have seen people tip for service, pay bonuses, and round up the grocery bill to include the charity. But never have we seen anyone write a “tip” or “bonus” check to the IRS. Taxes are often the single largest expense for our clients. The true way to lower this bill is through long-term planning. There are great planning options when it comes to Roth conversions and especially estate tax saving techniques for the affluent.

You are the one that drives your ability for success. Granted, we have to rely on society to help out as well but your decisions, priorities and actions will dictate what the future holds. Have a plan and revisit it annually, and you will have a much better chance of obtaining your goals. Save and properly diversify your assets that best match your goals and you have a higher probability of success. Properly insure your assets and reduce unnecessary risk exposure to help weather storms that others will not have planned for. Pay your fair share of taxes wisely to potentially create substantially more wealth over time.

Previously published in the Daily Sound.