Wealth management
Wealth management involves a variety of methods using financial products to increase wealth. You get higher returns from financial products when you invest over a long period. To achieve your long-term financial goals, such as your dream house and your child’s education, this is a key part of your financial journey.
Why is wealth management important?
There are a number of reasons why wealth management is important:
- With it, you can fulfill your future goals.
- Even when you are no longer employed, it provides a steady flow of income. You can ensure financial liquidity and help your loved ones to live a life of comfort, abundance, and security by doing this.
- Retirement can be a challenging phase due to the increasing cost of medical care and daily living expenses. But with wealth management, you will never experience a financial crisis and remain independent for the rest of your life.
What Is The Objective Of Wealth management?
According to legendary investor Warren Buffet, wealth creation is essential – “If you don’t find a way to make money while you sleep, you will have to work till you die”. This statement implies that one of the key objectives of wealth management is to be able to generate wealth passively by investing money earned previously. Savings grow over time and contribute to the investor’s wealth.
At its most basic level, wealth management involves growing your money to achieve various short-, medium-, and long-term financial objectives. An example of a short-term financial goal is to save enough for a vacation or to buy the newest iPhone. Usually, these goals need to be achieved within three years or less.
The medium-term goal is usually an investment goal that must be met within three to five years. Saving for a new car, saving for a down payment on a house, etc., are examples of wealth management goals.
Long-term goals, such as ensuring sufficient retirement savings, can have an investment horizon that extends over decades. To be able to support your post-retirement financial needs, you must create enough wealth during your working life.
To achieve such varied goals, you have to implement different strategies since there can be multiple objectives for wealth management.