You can work hard, but you can?t work forever. With the right knowledge and a little help, your money can do both. Wealth management, asset management, wealth enhancement, financial planning?whatever you choose to call it, it is one of the most important things you will ever do for yourself, your retirement, and your children?so you should have more than a passing knowledge of what all is involved.
You may have yourself a good start with home ownership, a 401(k) plan and life insurance, for example, but if that?s all you?ve got, you are missing out on a massive part of the potential wealth that your efforts can produce for your family and for yours and their futures. If a spouse contributes income or is responsible for rearing kids and managing the household, that spouse should have insurance equal to the spouse who works away from home. Should the life insurance policy start for the kids at birth or later on? Should that insurance be cash-value or term insurance? Should you get term insurance with the ability to be converted to whole life at each child?s 18th birthday? The decisions you make depend on your circumstances and your vision of the future. You may not know what is best for your family, but your certified financial planner does.
Saving for college is no trivial thing these days of tuition inflation at four times the rate of everything else. Those 529 plans may be good for you or they may not. If they are, which state offers the best plan? Perhaps mutual funds would be a better choice. Suppose your situation changes and you need cash, could you get at some readily and without penalty? Your employer may offer a variety of 401(k) plans; which plan is right for you? Should your contributions to your 401(k) plan be only up to the amount the employer matches, or should you go for the maximum allowed? Should your spouse also contribute to a 401(k) plan? If you need to borrow money for a down payment on a home, should you borrow from your 401(k) or set money aside in a savings account or equities specifically for that purpose? Then there are those medical and optical savings accounts as options.
Don?t forget about retirement and estate planning ? two very different things, but the wrong combinations and wrong way of purchasing and owning investments can send a big chunk of the legacy intended for your kids to the government. When do you need to start worrying about extended coverage for nursing home care? You can do everything right, but if you don?t have a will, the court will decide what happens to a large part of your estate.
The components of a solid financial plan form a never-ending list and no one can be a whiz kid at every item on it. If you fret too much you may make yourself ?insurance poor? and if you fret too little, you open yourself up to being vulnerable to excessive risk. Child care, the future of Social Security and Medicare, taxes, hedge funds, the future of the housing market - all cause one to ponder the difficulties of planning for the future and also make it an awesome responsibility to get right. Should your mortgage be paid ahead or should you put the extra in securities? Your answers to these difficult questions could well mean the difference to a comfortable retirement or a bare subsistence one.
An average financial planner will pay for himself ten times over, and a great one, over the course of your career, might help you realize the full potential of your wealth beyond what you ever imagined. Of all your investments, the most critical could be your investment in the sound advice of a financial planner.
For additional information on life insurance, estate planning, or any other wealth management topics, please visit Kennard Wealth Management Group of Ann Arbor.
Orignal From: Manage Wealth by Investing Yourself in the Plan Before You Invest Your Money
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