A 3-Point Plan to Optimize Wealth Management

Optimize Wealth Management

There’s no doubt that the coronavirus pandemic has changed the world, but you shouldn’t make the health crisis a scapegoat for the woes linked to improper asset and wealth management. The pandemic merely served as a reminder for investors, business organizations, and non-profit organizations to take a holistic approach and revisit their priorities and learn how to optimize wealth management.

Let’s not forget the increased uncertainty in the financial markets and increased operational risks related to client confidentiality and business continuity. All these issues emphasize the importance of revisiting your investment strategies, cash flow management, risk management, and ultimately, rethink how you optimize wealth management. The good news is that PersonalBanker has been helping Canadians to think differently about their financial habits and learn various stages of wealth accumulation and management.

Effective ways to optimize wealth management

You can optimize your financial and wealth management by evaluating all financial aspects of your life and making the necessary tweaks along the way. This way, you can be confident that you are doing the best you can even with the limited resources you own. Here are some of the ways to better optimize wealth management.

1. Implement an effective strategy to pay down your debt

Optimize Wealth Management

If you have debt, a smart money move is to create a well-thought-out plan to pay it off or pay it down. That sounds simple, but most Canadians never actually write that plan down on paper. That means they lack the clarity required to make strategic moves that can either save them money or allow them to use debt as leverage to increase wealth.

Once you create a debt payment plan, the best move is to ensure that you prioritize your debt payments depending on the interest rate. You should order your debt payment by attacking the high-interest debt first while ensuring you at least pay the required minimum on the balances you owe. This is the most cost-effective way to pay off your debt.

When you get down to the low-interest rate debts like mortgages and student loans, it is recommended to evaluate your plan. The best strategy may not be aggressively paying off everything until you owe zero, though total debt freedom may be quite gratifying emotionally.

It would be best if you considered how you could leverage your debt to grow wealth. Suppose the only unpaid loan is a property mortgage (interest rate 4 percent or less). In this case, the optimal move is to leverage that debt (instead of paying it off quickly). Use the money (cash flow that you may have used to pay off your mortgage) and invest it wisely. Assuming your investment’s rate of return is higher than your debt’s interest rate, you can maintain your mortgage payment schedule while getting a few extra dollars.

2. Rethink your savings plan

Another way to better optimize wealth management is to evaluate how you can best save for your future. You have probably heard this a million times, but the financial advisors at PersonalBanker still emphasize the importance of having a solid savings plan. Indeed, it would help if you contributed at least enough cash to your retirement account.

In Canada, there are many options available for individuals who want to save for their future. These include Registered Disability Savings Plans, Registered Retirement Savings Plans, Tax-Free Savings Accounts, and other personal savings & investment products such as stocks or bonds and savings accounts. An experienced financial advisor or planner can help you analyze the available savings options and choose a strategy that best works for your situation.

3. Rethink your wealth growth plan

Now that you know how to address your debt and save for the future, the other way to best optimize wealth management is to grow your wealth. Consider how you can actually add more wealth that you can use throughout your life. So, how do you do that? Make investments with a great rate of return!

Opening a retirement savings plan is not enough. Work with an experienced investment expert to evaluate your financial plan and elevate it beyond just saving money. This will give you more flexibility and freedom as to how you can grow your wealth.

Ready to optimize wealth management?

Well, effective financial planning and wealth management are complicated areas that require a highly personalized approach. There are many things like asset allocation that need fine-tuning, issues to address, and pitfalls to avoid if you want to manage and grow your wealth effectively. Keep in mind that these issues vary from person to person or organization to another. It is in your best interest to work with the PersonalBanker team to achieve the following;

  • Identify and invest in tax-efficient opportunities to optimize after-tax income (returns)
  • Create and implement a debt management strategy to pay down bad debt and leverage the good one to grow wealth
  • Rebalance periodically with tax policies in mind
  • Consider how a tilt toward certain asset classes could align your investment portfolio with your goals and desired risk level

As mentioned earlier, financial planning and wealth management are highly complex areas. What complicates money issues more is that the ripple effect of a single financial mistake could last longer and have a far-reaching impact on your financial goals than you think. Your best bet is to work with an experienced financial and investment advisor to optimize wealth management strategies.


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