Posted on Saturday 07 July 2018
With money comes a certain security that we all strive for. Whether you have recently come into money, been saving for a long time or finally got that promotion, you may be starting to consider how best to secure and continue growing your wealth.
Having a proper financial management and maintenance plan is key to a future of financial freedom, even if you feel like you have enough now. Especially when you are buying another home or getting an expensive gas guzzling car.
There is an art to maintaining money, so here are our top tips for avoiding plundering your hard earned cash:
Generally, once you have money it’s easier to make money. You can gain returns on your invested capital over time, with stocks, bonds or commercial real estate generally considered safe options. Each of these have their own risks, but with the proper research can be great avenues to grow your wealth.
So what should you invest in? Great question. Rule of thumb, anything that has a history of multiplying. The faster it does that, the better. However, this is according to your own preference. Do you prefer to be aggressive and make big deals quick? Or you are okay right now and don't mind waiting another 3 to 5 years for an ROI on your investment?
If you are looking to invest big and right away, most people seem to go into stocks. The market is open 24/7 and here you can really go crazy with your money.
If slow and steady is your game, go with real estate, investing in a tech business (Startups) and things of that nature.
Things that will take time to build. Most people do a little bit of both but at the end of the day, it really depends on what you want to do. Once you know what you are doing and want to get in big, get in touch with a financial guru.
Of course, a financial planner or portfolio manager can be a helpful resource. After all, it’s their job to predict financial trends. If played right, investments can become a form of passive income which is critical for building and maintaining wealth.
Whether you earn a lot or have a lot sitting in your checking account, it can be easy to assume that this is all you need to do. However, it’s worth setting up automatic payments into a high-interest savings or brokerage account before you forget to transfer it yourself.
This is also a great deterrent from spending it on impulse purchases. The best way to do this is sit down with your financial planner and they can literally setup automated accounts on the spot.
For example, some people like to automate monthly payments from their checking account to go into their mutual funds.
This keeps the mutual funds growing on auto-pilot.
You simply deposit your cheque or your income (The deposit part can be automated too) and the payments are taken care of. Round the clock on auto-pilot. Isn't that amazing? All you have to do is focus on your own work and your savings and investments will continue to multiply.
Now that's how you get rich and stay rich.
You have worked hard, so of course you deserve to buy yourself nice things from time to time. However, one of the biggest traps that wealthy people fall into is not keeping track of their outgoings. You may be surprised how quickly these can add up, so keeping a list will help keep your spending in check.
These days, you can either stick to the classic pen and paper style or have apps track things for you. So at the end of the month or however you planned it, you'll have a nice looking sheet with all the data you need to either curb your expenses further, or pat yourself on the back for doing a great job this time.
This is a big one by the way. As soon as you get a chance, take care of your family right away. You want your family to be financially secure no matter what. So sit with a lawyer or plan something on your own.
You want to make sure all your bank and digital passwords are either known to your spouse or someone you trust that can help your family out when needed. This is a downright essential step. After all, what's the point of money if you can't help your family out.
With more wealth often comes more assets and ultimately more responsibility. You may have dependents or loved ones that rely on you, so it is important to get your will in order.
Setting up a trust is also a great way to plan for your family’s future, and some trusts can even help reduce estate taxes.