Private Wealth Management: Some of the Basics to Know

If you're concerned about your financial future, your retirement, and your kids' inheritance, the chances are good that you've hired a qualified investment advisor to manage your investment portfolio. But even if you have a professional doing the heavy lifting for you, you might benefit from knowing some of the basics of private wealth management.

Before You Begin: Know What You're Getting Into. No single internet article is likely to give you a complete education on private wealth management, even if you stick to the most basic information. Your local bookstore has shelves full of texts that can give you insights in order to have a lively conversation with your investment advisor. The main idea: Consider this article a starting point, not a final destination. Learning about private wealth management is a lifelong process. (But also remember that, taken with a dose of skepticism, the internet can also be a source of information)

First: Learn The Basics. Again, this is usually easier said than done, and "the basics" of wealth management could fill many books. But to begin, you could use the internet to read about the topics you'll may want to know about, like tax law (even more complicated than you think, especially as your wealth grows); investment options (including mutual funds, ETF’s, government, corporate, and municipal bonds ) and risk management strategites,

Next: Determine Your Objectives, Time Horizon, and Risk Tolerance. This is the fun part. It's can also be the simplest part. Why do you want to build wealth? Is it so you can retire in comfort? So you can send your kids to a good college or give them a great inheritance? Are you saving up for something, like a home or a new business? When do you want to achieve those goals? How much volatility and risk might you be willing to accept? The reasons you're trying to build wealth will determine the strategies you adopt. Sit down with a pen and paper and write out your goals.

Then: Adopt a Disciplined Approach. Wealth management is a lifelong process, and as such it's not really something you do once and then forget about. It's usually a good idea to regularly spend  time thinking about your investment strategies. You might want to start slowly ; it can be as simple as checking your account balances every day. Anything that gets wealth-building on your mind is valuable.

Finally: Find a Qualified Wealth Management Consultant. Wealth management isn't generally something you can do entirely on your own, particularly if you're busy generating the income that builds that wealth. Finding an investment advisor may be the best tactic you employ. An advisor can worry about your investments for you, and guide you to strategies that are consistent with your financial goals. Consider a reputable, licensed, fee-only investment advisor and start asking questions.