If you just got a high paying job or came into some sudden money, it is smart to hire a wealth manager to help manage your finances. If you don't, you have a good chance of mismanaging your money and finding yourself deep into debt. Here are some important reasons to have private wealth management.
Setting Goals
Wealth managers know how to set achievable goals for the future with your money. Whether you want to buy your first home, a vacation home, or a small business, a wealth manager will set you on the right path. Your manager will help you budget correctly so you can live the lifestyle you want while still moving toward your future goals. It will keep you from making poor decisions that make you take much longer to reach these goals.
Proper Investing
Having a lot of cash on hand gets you into trouble. People with cash spend their cash, and you don't want to do that. If you have a lot of extra money just sitting around waiting to be spent, the best thing to do with that money is to invest it so it can grow into even more. Your wealth manager can help you come up with an amount to invest. It should be an amount that wouldn't cripple you if you lost it, but it would make a difference if it multiplied. Your manager can help you choose the right investments for your business and lifestyle so you come out on top.
Overspending
It's easy to buy high-dollar items when you make a lot of money. However, spending it all at once will leave you broke until the end of the month, and that can get you into serious trouble. Your wealth manager itemize what amount of your income goes to bills, what amount needs to stay in a safe place for emergencies, and what you can actually spend as "fun money."
Consequences of Purchases
When you buy a big house, it has upkeep that smaller houses don't have. You might have a pool or a large garden. You'll have to pay someone to take care of it, plus the expenses of the chemicals, fertilizer, and other things it needs. You'll have higher property taxes and insurance. Just because you can afford the sale price of the home, doesn't mean you can afford everything that goes along with it. If you want to buy a house, car, boat, or anything else, the wealth manager can do the long-term finances when it comes to these purchases to show you if you can ultimately afford it or not.
Retiring
The last thing you want to do is spend your life making money and not have enough to live off of when you're ready to retire. It's easy to lose a home after the mortgage is almost paid off because you didn't plan properly for retirement. Your wealth manager will help you organize your retirement finances so everything is in order from the beginning. This may include your own personal retirement savings, you 401k, your pension, and anything else you might receive at retirement. Having many different types of income in place will ensure that you can live carefree after you're done working hard.
Planning for Death
It might sound morbid, you have to plan for the day you die, and you can't expect it to be when you're old and gray. You could die tomorrow, and if you do, you need to make sure the people you love are taken care of. This means that you need to have a proper life insurance policy. Your life insurance policy should be worth at least 10 times your annual salary. If you make $2 million per year, you need a $20 million life insurance policy. This is because your loved ones need to be able to pay off any of your debts, handle your burial, and have enough to live off of until they can create their own life.
All of this planning and organizing of your finances is difficult when you have a lot of money. You work too hard to let it all go to waste. Hire a personal wealth manager to get all your ducks in a row and keep them there.
Share11 September 2015
After we bought a house, I started realizing that we were going to need to learn to save a little money. We had become pretty laid back about spending because we were so accustomed to making so much extra each month, but with a mortgage, we found ourselves running out of money on a regular basis. I decided to get real about our finances, which is why I set up a financial plan to stick with year round. You wouldn't believe how much of a difference that simple plan made. We went from scraping together money to head to the grocery store to sticking with a rock solid budget.
