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Beginner’s Guide to Wealth Management

Beginners Guide to Wealth ManagementIn years past, the ability to manage one’s own money seemed out of reach for many. The technology, the language, and the pressure to get it right — all contributed to the perception that your wealth management should be left to professionals.

The advent of easily accessible financial data and online brokers has changed all of that. Now, crafting a solid plan for your money is not much more complicated than opening a savings account!

But - that doesn’t mean it comes without risk. A slow pace and steady hand are essential to personal economic success. Read on for some tips on how to get started.

Learn the Tools

The internet has flung the gates of financial literacy wide open and given anyone with a Wi-Fi connection the opportunity to create and sustain personal wealth. Whether you craft a budget with Mint, build better financial habits with YNAB, invest smartly with FutureAdvisor, or bring it all together with Quicken, there is a tool out there to solve nearly every money problem you may have. All it takes is a Google search and some time.

However, all the best tools in the world won’t help if you don’t actually know what to do with them. Which leads us to our next recommendation...

Do Your Homework

Every investment is important and can have far-reaching consequences for your future. This is where research is key. Yes, instinct can take you part of the way, but it can also send you careening down the wrong path very quickly. A wrong investment decision can turn into a significant loss, one that you’ll feel in immediately in your bank account.

Start by looking at a company’s net income, revenue, and earnings per share, as well as other factors. These numbers will give you a peek into how the business operates and whether it’s worth your investment dollars. Also, make sure it’s a company that makes something or does something you support. If you don’t believe in its mission (or don’t even understand it), best to look elsewhere.

Assess Your Risk Tolerance

Managing your money by its very nature involves getting comfortable with uncertainty. In order to grow it over time, you’ll need to put at least some funds in investment vehicles that bring with them some amount of risk.

As you move through different stages of life, your relative tolerance for risk will likely change, If your goal is to replace that worn-out sedan with a souped-up minivan to haul around the kids, you’ll probably want to stay conservative with a mix of cash, CDs, and short-term bonds. If, on the other hand, you want to build a sizable nest egg over time that will finance your retirement, go aggressively into stocks.

When in doubt, take a moment to check your emotions and let facts guide you to where your money will do the most good to meet your unique life goals.

Diversify Your Portfolio

Whether you’re just starting out managing your wealth or have been at it for years, one word no doubt keeps coming up — diversification. Simply put, it behooves you to put your hard-earned money in a variety of different investment vehicles in order to achieve positive returns over the long haul.

So what’s the secret sauce? What’s the ideal blend of risk and reward? When do you hold ‘em and when do you fold ‘em? It depends on a variety of factors, including your long-term goals, short-term needs, and how much cash you can put into the game.

Get in the Game

Although careful preparation and research are important, they won’t help much if you don’t at some point hold your breath and take the leap into the pool. The water will be cold, you will make mistakes, but you will also grow that initial little nest egg into a financial foundation that will sustain you and your family for years to come.

USALLIANCE stands ready to help you hit the ground running. From IRAs to Certificate Accounts to our Financial Education Center, we provide tools to make a budget (and stick to it), build credit, and grow your savings.

Invest in your financial future