Creating A Better Financial Plan

Posted on: 4 November 2021

When wealth management firms advertise, they often emphasize how many services they provide. This can create the impression the process is all-encompassing and leave little room for personal creativity or control.

The reality is quite a bit different. Wealth management is a set of services that you can select according to your needs. However, this brings you to questions about how much help you require. Here's how you can assess your level of need for assistance managing your wealth.

Desired Involvement

You'll want to cover the basic question of how involved you want to be. Suppose you run a very successful medical practice and want to focus on that. Keeping tabs on investments, cash flows, and other money issues on the personal side of the ledger may not seem very exciting to you. If you're in this position, you want to go all-in on wealth management services.

Conversely, some individuals need assistance filling in gaps. A person might be very successful at making aggressive stock bets, for example. However, they might find the questions about stability, income, retirement funding, mortgages, and taxes challenging. That's a customer who may need more specific guidance than high-level and broad help.

Math and Stats Background

Another factor to consider is how versed you are in mathematics and statistics. This extends well beyond being able to read a spreadsheet or understand things like algebra and calculus. Rather, financial growth is based on an aspect of statistics that doesn't feel intuitive for all people. The fundamental idea is that compounding wealth can become a self-sustaining mechanism if you manage it well. Beyond being good with money and math, you also need to think about market volatility, risk, diversification, taxes, inflation, and a host of other problems.

Once more, these things don't feel intuitive to everybody. Watching a successful investment like buying several rental properties lose 25% of their value to a macro trend like a recession can be perplexing. Wealth managers, however, can help you hedge these sorts of risks so your money grows consistently over the long run even if it hits short-run bumps.

Independent Input

Finally, you should look at how much independent input is in your life. Do you know and regularly talk finances with people who have managed their wealth well? Mind you, it's not enough they say so. You should see proof, and their ideas should be consistent with proven wealth management strategies. If you feel like you don't have several people who can provide independent input at a moment's notice, you should consider asking for professional support. For more information, contact a company like Horan.