The best wealth management plan has nothing to do with forces beyond your control, but rather everything to do with what’s most important to you.
Instead of feeling overwhelmed by the supposed complexity surrounding financial decisions, a straightforward wealth management plan can bring clarity and peace of mind about which strategies will work best in your particular situation.
What Is a Wealth Management Plan?
Behind the scenes, a wealth management plan involves number-crunching and various strategies. Upfront, it should summarize this data into a document representing:
- Three to four factors most important to you
- Action items to be accomplished
- A reminder of why you are doing these items
Similar to stock markets, no one can predict what will happen in the future. Life events such as a new baby, a death in the family or a medical issue can derail the best-laid plans. Therefore, it is critical to not only be flexible when it comes to wealth planning but also in life planning as well.
Tedious, but critical, everyday steps that lead to a financially healthy life, such as maintaining a high savings rate, paying down debt, avoiding credit card debt and preserving a high credit score, can help you have the financial and personal flexibility you may need when life throws you a curveball.
Here are some critical aspects to keep top of mind when managing an unexpected financial situation:
Wealth Planning is an Ongoing Process
As your life evolves, your wealth plans must evolve as well. What may have been a focus in your 20s and 30s, won't likely be your focus in your 40s and 50s. Don't hold tightly to the plans of today that could negatively impact your future. Be open to changing your wealth plan as you age and your priorities change.
Goals Will Come Second to Priorities
I could never have imagined having four kids, let alone triplets. Goals and plans I had pre-kids suddenly changed overnight. My wife and I had to focus on our immediate priorities, which were many. This does not mean you should suppress your goals if they still fit within the life you ultimately want, but you may have to delay them a bit to focus on what you must do today. (For related reading, see: Setting Financial Goals for Your Future.)
You Cannot Prepare for Everything
Have you ever been through a job change that wasn’t by choice? You may not have had any time to prepare for a change of that magnitude. However, everyone I know who has gone through a situation such as this has bounced back stronger than before. With a healthy mind and spirit and reliable support system, just about any situation can be overcome.
The key is to have a flexible wealth management plan based on your personal financial goals, and to have someone on your team who is always looking out for your best interest. Combined, these factors can give you financial peace of mind and help you make the most of your money.
(For more from this author, see: Optimize Your Spending to Increase Your Happiness.)