What Are The 5 Eternal Rules Of Wealth Management?

Wealth management
Wealth management is an essential aspect for every individual to protect and grow their money in the long term. It involves a lot of strategising and planning to devise a scheme that suits one’s financial goals and objectives the best. Here are the 5 eternal rules of wealth management that one must follow –

Separate personal beliefs from monetary facts:

Always make sure that you keep your money beliefs and facts separate. Money is only a medium of exchange, and that is it. Everything else you think in your head comes from family or personal beliefs, societal norms or social stories. For example, if you think money is a game of luck or you will never have enough of it, you will never be able to work to the best of your potential to get it. Instead, have an optimistic mindset that will allow you to dive deeper into wealth and everything wealth-related.

  1. Have a 3-month reserve: 

Always keep a reserve that could last you for at least 3 months; if you lose your primary income source. It is surprising how most people do not have any funds that are kept aside in case of downturns. When you build and maintain a reserve for tough times, you do not directly go into a huge debt when income stops coming in. The reserve also helps you use the money to create more money by either short-term investing or starting something little of your own with the amount you kept for such an occasion. 

  1. Never ever fall into a consumer debt: 

Do not make buying on credit a habit. Using your credit card once in a while is alright, but it can lead you to sink into debt which you may struggle to pay later. The only time when you should take loans is for investments and never for daily use. If you already have an obligation piled up, do not make the mistake of buying more on credit but pay off the debts first. Only buy new things when you have the money to pay for them immediately. Optimise your spending wisely and spend on things that are actually worth it instead of splurging just for the sake of it. 

  1. Understand all the wealth management products that you own: 

Money products can be complicated. First, however, you must understand all the money products that you own. Your pensions, insurances, funds, investments, and more are items that need thorough understanding for you to realise their role and what they can do for you. You don’t have to understand how they work, but you have to know what they have to offer. 

  1. Increase and invest:

This is one of my favourite rules to follow. Increase your money and invest the money to increase it further. It is like a never-ending cycle. Get onto inventive measures to increase your income and look out for better opportunities out there. Set a financial goal, a number you want to achieve and strategise how you will do it. Once you start increasing your money, invest it. Learn the basics of investing in your wealth and growing it further. Play it safe initially, and begin with ETF’s as an investment opening. Once you start getting better at your investments game, you can start taking riskier but more lucrative options like trading to increase your money supply robustly in less time. 

BONUS RULE:

  1. Know precisely what you want and take control:

It is vital for you to know and realise exactly what the things you want are. If you do not know what you want, it will be the money controlling you instead of making money your tool. Remember, you use the money to buy things. So do not let money use you to get those things!

Final Takeaway

Money management involves these 5 eternal rules of wealth management that an individual must follow for better growth and successful wealth management. First, it is imperative that you review all the investments regularly and are patient enough to wait for the right results. Learn about all the products you own and are willing to hold and educate yourself upon the market trends and your individual goals and objectives. 

Your investment and wealth management plan keeps on changing, depending on which stage of life you are in. when you initially start to earn, it is better for you to save and spend equally. When you reach the middle ground, save more and spend less becomes your motto. Finally, when you reach your retirement stage and have enough money saved, you spend as you like without saving much. Hence, you must follow the wealth management rules early in your life to make sure that you extract the best out of your financial planning.

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