Wondering About Wealth? Here’s How to Create a Wealth Strategy
Financial security can be a blessing for you and those you love the most. More and more American households are reaching this security level.
They’re finding out that their income levels can afford them more wealth into the future. This wealth can last, even after they stop working.
That’s why wealth-building strategies are worth your time to learn more about. You can find out more here on how to create a wealth strategy.
Follow these steps and you’ll be able to preserve that nest egg you’ve worked your entire career to earn.
What Is Wealth Strategy?
Wealth strategy means high earners managing their assets. This requires them to use a wide range of products and services to grow and protect their assets over time.
An individual that earns at least $1 million in liquid assets is a high net worth individual (HNWI.) Any individual with assets ranging from $100,000 to $1 million is an affluent or sub-HNWI investor. An investor who earns over $30 million in assets is an Ultra-high net worth investor.
Current reports show that more than 8 million US households are worth more than $1 million. This is a jump from 2016 data that reported roughly 4 million households in this same category.
What’s Included When I Create a Wealth Strategy?
It’s easy to confuse the term “wealth strategy” with “financial planning.” Financial planning addresses short-term lifestyle planning tasks like refinancing your home.
A wealth management strategy provides holistic financial planning. It’s the long-term view of all your investment sources.
Wealth management strategies can include real estate and business investments. They also cover risk management, and tax and estate planning.
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Here is a detailed look at what each of these wealth strategies means for your long-term financial picture:
Investments management includes managing various securities and assets like real estate or bonds. Investors analyze and consider stock purchases.
They can also consider investment contracts with other private or institutional investors.
Risk management means identifying and lessening any uncertainty that surrounds an investment decision. Risk management includes analyzing and assessing an investment’s capacity to lose value.
When you have this information in hand, you can decide whether your wealth management consultant can sell it or buy more. They might suggest you doing nothing. Your risk management tolerance levels drive these decisions.
Tax and Estate Planning
Tax planning means reducing your tax liability. You can do this by leveraging tax deductions and other legal exemptions. There are many legal methods for lowering your tax liability. These methods aren’t considered tax evasion nor tax avoidance.
Estate planning refers to planning on how to distribute your assets after you die. An estate plan addresses how you’ll prepare your estate taxes. It will also cover how to deliver your assets to your beneficiaries. A wealth management professional works with your probate attorney to do these tasks after you die.
Investing in real estate means purchasing and managing rental properties. Investors will buy land or a building and rent the space to tenants. This investment strategy is profitable because buyers can assume possession of the property. They just pay a portion of the total costs upfront.
What Is a Wealth Strategy Consultant?
A wealth strategy consultant creates wealth strategy plans that reach their client’s monetary goals. They can also review their client’s financial obligations.
They will also develop a portfolio based on their client’s current financial condition. This condition includes the client’s risk comfort and other goals.
Wealth strategy consultants get a certification called a registered investment advisor (RIA.) RIA status means that they have a fiduciary responsibility to always put their client’s interests ahead of their own.
A wealth strategy consultant works with others in a small-scale office. They might also have their own solo practice. US banks like Goldman Sachs or JP Morgan also provide a private wealth management business unit.
Many wealth strategy advisors will charge a fee based on the value of your assets that they manage. A fee-based professional receives no payment for any product sales.
A wealth strategy consultant’s salary ranges from $75.000 to $115,000. These professionals earn bonuses for their service as well.
Commission payments allow advisors to collect on each financial product their client buys. These products include securities or annuities.
How to Become a Wealth Strategy Consultant
A wealth strategy consultant must earn their bachelor’s degree to begin their career in this job field. These professionals might also earn their master’s degree in other related disciplines.
If a wealth strategy consultant wants to provide advice on how to invest or buy and sell stocks or bonds, they must have their license to do so.
A wealth strategy consultant with smaller companies must register with state regulators. Advisors with larger firms can register with the US Securities and Exchange Commission.
Wealth strategy consultants can also earn their Certified Private Wealth Advisor (CPWA) certification. A CPWA declares that the consultant is an expert on wealth life cycles.
A consultant with a CPWA can preserve and accumulate your earnings. These professionals will also help you write a plan to distribute your earnings. They can also create strategies to transfer your wealth. These transfers can reduce your tax liability.
Ready to Create a Wealth Strategy Today?
Are you one of those fortunate HNWI earners who’s looking for a wealth management consultant?
Start by scanning the Securities and Exchange Commission’s investment advisor search page. That’s where you can find the right professional who can help you create a wealth strategy.
Always confirm that your consultant has their RIA status. Ask them if they have any conflicts of interest with your portfolio. These conflicts might interfere with your working relationship.
For more advice on strategies for wealth, check out our website. We can be your partners. Let us help keep your financial plans on track throughout every season of your life and beyond.