Smart Wealth Management Tips for People of All Ages

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The concept of wealth management is often misunderstood, but it is an important part of life no matter who you are or how much you earn. You do not have to be wealthy to benefit from sound wealth management; workers who hope to be rich someday can use the same techniques as their more well-off peers.

So whether you are already wealthy or just working toward that goal, there are some things you can do to make the journey easier. Here are some smart wealth management tips for people of all ages and income levels.

Start Early

Perhaps the number one wealth management tip does not involve money at all, at least not directly. Instead, the most powerful tool for wealth management is your time, and the more of it you have, the easier it will be to save and invest.

“All else being equal, the worker who starts saving for retirement in their 20s will accumulate far more wealth than their coworker who starts in their 50s. Even more importantly, the power of compounding means that the younger worker will need to put up far less of his or her money, making saving that much easier,” confirmed by Thane Stenner, an award-winning wealth advisor at Canaccord Genuity—an investment and wealth management firm. Albert Einstein is reputed to have said, “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” Understandably, one should take some advice from these two individuals.

Educate Yourself

One of the biggest roadblocks in the world of wealth management is the intimidation factor. It is easy to think that investing and wealth management are simply too complicated for ordinary people to understand and that the only choice is to hire a financial advisor.

Financial advisors have their place, to be sure, and there are real advantages to getting outside help from time to time. Even so, it is important to educate yourself. Whether you work with a financial professional or take a more DIY approach, understanding the basic concepts will make you a better investor.

More importantly, having your own base of knowledge makes you less of a target for unscrupulous financial advisors. The more you know about investing and wealth management, the easier it will be to make smart decisions about the individuals who represent your finances.

Estimate Your Income

Building wealth does not happen in a vacuum. Whether you are fresh out of school and working at your first job or on the cusp of retirement, you are saving money with a goal in mind.

“Whether that goal is a financially secure retirement or the education of your children, the accumulation of wealth is just one step in the process. In the end, you will need to turn the assets you accumulate into income, and estimating that stream of cash is an integral part of successful wealth management,” said Thomas Rauchegger of Cramer & Rauchegger, Inc. – specializing in helping people plan for and enjoy their retirement.

There are tools and calculators you can use to estimate the income your portfolio can sustain, and running the numbers can be very instructive. Looking at wealth in terms of annual income and not just portfolio value is essential, no matter who you are or how much you earn.

Focus on Your Career

Other than time, the most important asset you have is your ability to earn a living. Without a steady stream of income (or a winning lottery ticket), building wealth will be all but impossible. And since you are unlikely to win the lottery any time soon, building your career and your earning power is the next best thing.

If you want to build wealth for the long term, start by focusing on your career. If you need more education to get that next promotion, talk to your boss about taking some classes. If the next rung on the career ladder requires additional skills, look for creative ways to acquire that knowledge. The more you know, the easier it will be to move ahead in your career, and that will be good for your future wealth accumulation.

You do not have to be wealthy to benefit from wealth management. While the term may be a bit intimidating, wealth management can benefit everyone, regardless of the holdings in their portfolio or the size of their paychecks.