Establishing Priorities in Wealth Management
At its most basic level, wealth management is a matter of setting priorities and working towards them.
Without understanding what you want to achieve and why, wealth management is a near pointless exercise. What do you want and when do you want it by? These are two key questions that must be answered before you embark upon a successful wealth management program.
When you understand what you want to achieve everything else is a mere detail.
It is important to understand that wealth management is more than just managing and growing money. There are however some key priorities that should be considered when thinking about wealth management. How you choose to manage these priorities will depend upon your own values and priorities.
Priority 1 – Are you in danger of losing assets? If so then planning should start around mitigating the risk and resources should be used to reduce the debts endangering your asset.
Priority 2 – Is your insurance cover adequate? If it’s worth owning, it’s worth insuring. If it earns you money you need to protect the income source.
Priority 3 – Do you have sufficient emergency savings? Putting money away for a rainy day is a simple strategy you can use to guard against those disasters that come out of nowhere. Ideally you should be aiming to have sufficient funds to survive for at least three months.
Priority 4 – Superannuation – are you making the most of the long term investment opportunities that Superannuation allows. Making your own contributions will help you to build a healthy long term nest egg.
Priority 5 – Reduce High Interest Debts – Credit cards carrying high interest rates can be savings and investment killers. Getting on top of these should be a priority.
Priority 6 – Home Ownership is a great long term investment Getting into the home ownership market is a critical step to long term financial health.
Other priorities can include retirement planning and education expenses (either your own or your children’s). You may have some other pressing needs to be addressed – if so you need to factor them into your planning and measure them against these other authorities.
At Australian Financial Hub we can assist you with all aspects of wealth management. We offer services ranging from Self Managed Superannuation Funds, through to Personal Insurance. Contact us today to discuss your wealth management plans.