3 Tactics to Help Simplify Wealth Planning

Jun 13

The best wealth management plan has nothing to do with “outside forces” beyond your control, but rather everything to do with what’s most important to you.  Instead of feeling overwhelmed by the supposed complexity surrounding financial decisions, a straightforward wealth management plan can bring clarity and peace of mind about which strategies will work best for your situation.

What, How, and Why

Behind the scenes, a wealth management plan does involve number crunching and various strategies to implement.  Up front, it should summarize this data into a document that represents;

  1. Three to four things that are the most important to you.
  2. Action items that need to get done.
  3. A reminder of why you’re doing them.

A wealth management plan should never be set in stone.  A plan should be used as a guide and adjusted as often as life transitions occur.  It is not about getting things “right” but instead about realizing that you will always get things at least a little wrong.  Problems are never quite as bad as they seem.  While many things seemed out of control, you still can make necessary changes and set yourself on the right track.

Give Yourself the Gift of Time

Creating a wealth management plan is one of the best ways of giving yourself something that everyone wants more of, time.  Most of our money decisions are driven by a desire to feel happy, safe, and secure.  Wealth management plans should not be focused primarily on money; you should consider three other key factors;

  1. Time, the calendar and the checkbook never lie. The way we spend our money and our time often say something about what we value.
  2. Skills, while compounding and a disciplined savings plan will help your assets grow, human capital will always be your best and greatest investment.
  3. Energy, when we think about money only regarding dollars and cents, we risk depleting our energy due to factors beyond your control.

Figure Our you Why

Before you can plan, you must know why you’re planning.  Realize the connection between tangible things like the money you make and the intangible things like how great it feels to be there when your daughter scores her first goal.  Knowing your values can help eliminate distractions and help you focus on what’s most important.

Famous investor George Soros once said, “there is no shame in being wrong, only failing to correct our mistakes.”  Don’t use the mistakes you’ve made in the past as an excuse to deny yourself what’s important.  Disappointments often come when people are so focused on outcomes that they miss out on life.  Instead, try letting go of the following;

  1. Expectations about the future, don’t turn a guess into an expectation.
  2. Outcomes we can’t control.
  3. Need to measure ourselves against others.

Take Back Control

If we want to take control of our finances, we must also take responsibility for our spending and know that nothing will change unless we change our behavior.  Wealth planning isn’t just about numbers it is a tool for awareness. Its purpose isn’t to punish ourselves for spending money; it’s to become very aware of how we’re spending our money so that we have enough for the things that matter most.

Don’t deny yourself the things that help keep you healthy, happy, and sane today.  Spending a lot of money on something, even items that you would consider a luxury, doesn’t necessarily mean you’re making a bad financial decision. It may well be the best decision for you, but only if it’s in line with your goals and values.

The more we can make money decisions that support our values, the less likely we’ll regret those decisions, even if they’re expensive choices.