Wealthy individuals invariably have great stories to tell about how they grew their business or what they have been able to contribute to their community. However, they generally leave out the more mundane means of their success: a sound financial plan. By paying attention to some key principles and strategies, investors can leverage their assets most effectively for a successful financial future.
5 Key Strategies
These strategies were given to us from the team at Mirador Capital Partners, a wealth management firm located in the Tri-Valley area of California not far from the San Francisco Bay area.
1) Investment Management: The engine powering any wealthy person’s financial plan is their investment portfolio. The most assured way to find success in yours is to diversify your investments and make regular contributions. As your wages increase, so should the percentage that you allocate to these accounts.
2) Retirement Planning: Unless you’re intentional, it’s hard to end up with the life you want when you’re 70. Wealthy investors typically identify their needs in retirement and then work backwards to achieve these specific goals. Be open with your spouse or family about the life you want to lead and the goals you’re working towards so they can hold you accountable.
3) Education Planning: Saving early and frequently through a tax-advantaged 529 plan is the best way to maximize your dollars for college tuition in the future. Planning your contributions ahead of time can result in saving tens of thousands of dollars on final college expenses.
4) Tax Planning: Success isn’t exclusively the result of a strong offense. A solid financial plan should include a calculated defense that will protect you against losses. Work with your tax professional to identify potential landmines that, if triggered, would cause significant damage to your portfolio.
5) Estate Planning: Perhaps the most neglected part of financial planning, estate planning is essential to ensure your wishes are carried out and to minimize the burden for your loved ones to manage. Having your affairs in order will bring peace of mind to your family and create protocols to be followed in the event of your incapacitation. Be proactive here to address your needs and you will save more than a few dollars.
If you’re interested in hiring a financial advisor, it’s in your best interest to work with a Certified Financial Planner (CFP©). Advisors who have completed this program are considered to have the highest standards of ethics in their field and formal training in structuring the best plan to help you reach your individual goals.
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