Whether you’re just getting started or have already taken a few steps, here are seven tips for wealth management.
Define your financial priorities
Creating and following a monthly budget carefully is crucial when struggling with debt and wanting to make ends meet.
But when you are wealthy, you might not feel the need to track each dollar you spend. All that matters is that you’re living within your means and have a plan to save and invest money strategically. This is how your wealth will keep growing.
So, take a moment to redefine your financial priorities. Think about what you want to accomplish with your wealth and how you want to do it. Consider automating some tasks so you don’t have to spend all your time managing your money.
Seek the advice of a professional wealth manager
If you’re interested in implementing the best wealth management strategies for your unique situation, don’t hesitate to seek the advice and guidance of an expert.
Whether they work for a family office or a financial advisory firm, professional wealth managers can help you create and implement a personalized plan to achieve your financial goals. Start by assessing your goals and needs, then look for a wealth manager who offers the types of services you’re interested in.
Be strategic with your investments
We don’t have to tell you that building a diversified portfolio is a great strategy for managing risk. It also increases the likelihood of enjoying long-term returns.
The key is to be aware of your risk tolerance and to find a balance between the different assets you want to incorporate into your portfolio.
By investing in real estate, high-yield savings accounts, index funds, cryptocurrencies, and various sectors and industries of the stock market, you should be able to navigate market fluctuations more smoothly than someone who only invested in one asset.
Be strategic about your insurance as well
Wealth management is also about being strategic with insurance. You can maintain peace of mind by ensuring your property, car, and most valuable assets, knowing they will be protected no matter what happens. If your policy accumulates cash value over time, you could consider life insurance an investment and an asset.
When you purchase a permanent life insurance policy, you can withdraw a portion of your death benefits in the future or take a loan against your policy.
Research your options for tax optimization
As a wealthy Canadian, you can expect to be taxed more than someone who earns a low income. However, you can benefit from different opportunities and strategies to reduce your tax liability.
For example, investing in your community and retirement are great strategies to pay less taxes and preserve wealth. Of course, you can also optimize your taxes by taking advantage of tax breaks and credits. Don’t hesitate to ask for the advice of your accountant or financial advisor on that matter.
Carefully plan your gifts and donations
Gifts and donations can be a way to help your loved ones or to support charitable causes that are close to your heart. They can also allow you to manage your wealth in a tax-efficient manner. By taking advantage of the annual gift tax exclusion, you can reduce the value of your estate and lower your taxes.
Sharing your wealth with your children and grandchildren has other advantages. It allows you to provide them with valuable guidance on managing their wealth, both now and in the future.
Preserve your wealth by planning your estate
The last of our wealth management tips is to plan your estate carefully. Estate planning might not sound exciting, but it’s necessary. You want to ensure that your wealth is preserved for future generations and managed exactly as you want after your death.
Consider working with a professional estate planner who will help you create your will, minimize your estate’s tax liabilities, and ensure that your assets are preserved and distributed according to your wishes.