Importance Of WealthImportance Of Wealth

Wealth gives person flexibility and the ability to affect the world in a number of ways.  Wealth gives a person comfort and control, and makes life easier in some ways.  However, wealth alone cannot bring true happiness, nor can wealth alone bring true love.  A great philosopher once said "Money is a barrier against all possible evils."

Money can prevent the sufferings that come with poverty like cold and hunger. While sickness can not be totally obliterated by money, it can be considerably relieved by it. Giving away money to charity can also provide us with the satisfaction of relieving others from suffering. 

Lifestyle maintenance

Your most important planning objective is to maintain your current lifestyle and ensure your financial independence. One of the major obstacles to effective planning is the gap between the perception of wealth and reality of wealth. Thus, you should clearly define what is required to maintain your current lifestyle. In other words, the annual income needed for personal consumption and material assets (house, car, vacation home) to maintain your lifestyle and adequate liquidity.

Questions you should consider when establishing a wealth management plan include:

  1. What are my financial and non-financial goals for my heirs?

  2. Does my wealth management plan accomplish those goals?

  3. What is the best structure to provide my heirs with appropriate assets?

  4. Have I provided for unforeseen circumstances?

  5. What is the best structure to promote our family values?

  6. Are my heirs prepared to act responsibly with the assets I leave them?

  7. Will my planning bring my family members closer together or pull them apart?

  8. Have I made provisions for my community legacy?

The most important step in the planning process is to establish clear and concise objectives for your wealth management plan. You should then design a plan that is responsive to your core interests, needs and concerns. It should acknowledge and address the desired level of involvement you want to retain in “managing” philanthropic activities and should incorporate the interests, expertise and desires of heirs. Additionally, it should take into account your total estate plan in a manner that is timely, effective and tax efficient.

Benefits of Wealth Management

Life has a habit of creeping up on you. One minute you’re climbing the career ladder, trying to boost your salary and savings, the next you’re thinking about how you’re going to support yourself when you decide you no longer want to work full-time. Taking a sensible and considered approach to financial planning is a great way to be ready for whatever the future holds.

Financially, many people never see beyond the next month or two. Sure, they may be conscientiously saving for a rainy day, but they won’t look at their finances with any real long-term sophistication. This is where lifetime wealth planning comes in.

This sensible approach to financial planning ensures that you are fully aware of the impact of the decisions you make when you’re managing your money and how these could affect the goals you have set for your money.

Where lifetime wealth planning can be of most use is in retirement planning. And as the state pension is unlikely to provide anywhere near enough income it’s not surprising that most people will need another source of income from a pension pot they’ve accrued while in work.

We believe that lifetime wealth planning is the best way to achieve the financial future you want. Be that the income you need in retirement or a shorter-term goal.

Ten reasons validating the importance of Financial Planning:

  1. Income: It's possible to manage income more effectively through planning. Managing income helps you understand how much money you'll need for tax payments, other monthly expenditures and savings.

  1. Cash Flow: Increase cash flows by carefully monitoring your spending patterns and expenses. Tax planning, prudent spending and careful budgeting will help you keep more of your hard earned cash.

  2. Capital: An increase in cash flow, can lead to an increase in capital. Allowing you to consider investments to improve your overall financial well-being.

  1. Family Security: Providing for your family's financial security is an important part of the financial planning process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.

  1. Investment: A proper financial plan considers your personal circumstances, objectives and risk tolerance. It acts as a guide in helping choose the right types of investments to fit your needs, personality, and goals.

  1. Standard of Living: The savings created from good planning can prove beneficial in difficult times. For example, you can make sure there is enough insurance coverage to replace any lost income should a family bread winner become unable to work.

  2. Financial Understanding: Better financial understanding can be achieved when measurable financial goals are set, the effects of decisions understood, and results reviewed. Giving you a whole new approach to your budget and improving control over your financial lifestyle.

  1. Assets: A nice 'cushion' in the form of assets is desirable. But many assets come with liabilities attached. So, it becomes important to determine the real value of an asset. The knowledge of settling or canceling the liabilities, comes with the understanding of your finances. The overall process helps build assets that don't become a burden in the future.

  1. Savings: It used to be called saving for a rainy day. But sudden financial changes can still throw you off track. It is good to have some investments with high liquidity. These investments can be utilized in times of emergency or for educational purposes.

  1. Ongoing Advice: Establishing a relationship with a financial advisor you can trust is critical to achieving your goals. Your financial advisor will meet with you to assess your current financial circumstances and develop a comprehensive plan customized for you.

by Deepak Rawat
References and Bibliography
Better than Normal is a book authored by Hitesh Ramchandani. A journey of self-belief and unwavering determination.To Know more about us just move to http://www.betterthannormal.com
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