Simon Lucas

5 Golden Rules of Wealth Management If you're an entrepreneur in the survival stage of a business start-up, it's understandable that you might dismiss the idea of paying for wealth management advice. After all, if it’s taking every penny you can raise just to keep your new business afloat, there’s really not much else to think about. However, it pays to be positive, because at some point the survival stage will be past and there will be some residual wealth to protect. Wealth management is for everybody, especially family business-owners and entrepreneurs. In short, there’s no time like the present to start thinking ahead. When you strip away the industry jargon, that’s a large part of what wealth management is all about. These Golden Rules Will Get You Started The following five simple, but truly golden rules will help familiarise you with the basics of wealth management, so you can start taking control of your financial future. Rule 1 – Have a Strategy Wealth management is about making the right investment decisions for the long haul. Develop a long term strategy to invest in an instrument that is interesting or feels right. This could be property, the stock market, just a bank account that pays interest... Whatever feels comfortable to you. The important thing is to plan some kind of long-term investment. Rule 2 – Plan for Retirement This is one of the reasons why rule 1 is rule 1. Retirement may seem a very long way off, especially for younger people. That’s exactly why it’s never too early to start planning. Retirement plans should have a place in long-term wealth planning. Thinking about dreams and aspirations for later life can be a good motivator for retirement planning and give a kick-start to the process. Rule 3 – Maintain Some Liquidity While wealth management begins with long term strategy, it’s important to save and retain some cash funds. Locking every spare cent away in futures or even property is fine—until a crisis unfolds. Wealth planning experts recommend trying to save a minimum of 20% income per month in easily liquidated cash. Rule 4 – Have a Medium-Term Objective Having explored wealth planning for the longer term and retirement, as well as the need to keep some liquid funds available, you should really set yourself a mid-term goal. Everybody has some goal after all. Yours might be to own a home, open a second business or buy a car. Whatever your mid-term goal may be, the important thing is to visualize it and invest with that objective in mind. Rule 5 – Don’t use Credit you Can’t Pay Back on Time Wealth management is not just about planning for saving and investment, it also means managing credit. Having some credit is not necessarily a bad thing. It is a bad thing though, to have credit knowing that timely payment might not be possible. On the other hand, good management of credit will build a solid credit history to give lenders confidence. This bodes well for anyone hoping to grow a business, as some future borrowing may be necessary for expansion. That’s where a sound history of responsible credit management pays dividends. Want to Go Beyond the Basics of Wealth Management? By following these five golden rules of wealth management, you can get off to a good start under your own steam. Once you start to see results though, you might well become a bit more ambitious in terms of investment decisions. If you do eventually get bitten by the wealth management bug, you'll probably want to develop a diverse portfolio of financial products. At that point your plans should include the services of a good financial consultant If you're concerned that this sounds rather expensive, don't be. The cost of financial consulting is modest and in reality, it's as sound an investment as any when it comes to managing and protecting your future wealth.