The words “wealth management” imply that it’s a service or activity for people with high net worth — a lot of dough to spend or invest. But it’s the middle-class families and retirees on down who really need it, simply because they don’t have as much wealth to spare.
There are many important steps you can take on your own to put your present and future on a solid financial footing, no matter what life may throw at you:
- Keep an emergency fund in a savings account or short-term CDs, enough to cover three to 12 months of expenses. This is critical for protecting yourself against unexpected job losses or medical bills. Try to build that up even more if you’re working in a field where job openings are few and far between.
- Know how much you want to save for retirement; many experts suggest saving 10 times your annual income. The number depends a lot on what kind of lifestyle you want to have once you are done working.
- Look into every type of retirement savings account available to you, whether it’s a 401(k) plan at work, an IRA (either traditional or the Roth version) or whichever product works best for your future. Then pick one.
- Don’t be shy about putting some of your savings in the stock market, where it’s likely to multiply faster and further than most savings accounts. But do keep an eye on current economic and political conditions and how they’re affecting market trends.
- Carry all the insurance you’re going to need, including life, health, home and vehicle.
You can make this a DIY project, especially if you’re already financially savvy, but there are situations where bringing in either a wealth manager or financial adviser to help you out would be wise, including:
- If you’re experiencing or planning a major family life change such as parenthood or divorce. Even couples seriously dating may want to drop into an office to get a sense of where they stand on financial issues, which have doomed many a relationship.
- If retirement is on the horizon or already here, a specialized planner can help you figure out what your goals for that phase of your life are and what steps you need to take to achieve them. Some of the planners you consider may boast a retirement-specific credential after their name but make sure it’s a rigorous one that isn’t too easy to secure.
- If you have too many investments to be able to monitor each one closely, or if you have little interest or aptitude for spending or tracking money, bringing in an adviser can be an especially good idea.
Wealth managers and financial planners take different approaches to the responsibility of managing your finances, though both generally set a minimum net worth for their clients.
Besides generally working with higher net-worth clients, most wealth managers provide holistic services addressing all areas of their clients’ financial lives from tax work to legal and estate planning. Many financial planners, on the other hand, have a specialty such as investing, accounting, life insurance/estate planning or others often based on the kind of certification they have.
The Golden Corridor is home to many qualified financial professionals. Working with a planner who lives and works in your community means you’re talking to someone familiar with the costs of living there and how to maximize your potential to live your best life.