Transitioning on from the early years that we discussed in a recent post, most of us get to that stage where wealth accumulation becomes important. There comes a time in our lives when financial planning takes on a whole new meaning of responsibility, commitment, priorities and goals. From what used to be an individual’s need for financial independence you find yourself becoming the integral and pivotal source of funds for your dependent loved ones. With the growing financial obligations comes, no doubt, a feeling of satisfaction in being able to fulfil these demands. With some thought about sound investment options and a proven financial planning system, you can achieve a healthy financial balance and be stress free.
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What are some common financial requirements of individuals and families in this stage of life?
- A good home - so think: financing required for a down payment, mortgage, homeowner’s insurance, property taxes, and the ongoing maintenance and upkeep of your home and surroundings
- Children and family - aside from daily and basic necessities you have other expenses to think of such as daycare costs, education (especially putting aside funds for college / university fees), family vacations, etc.
- Travel - daily commutes to work and school are not getting any cheaper with the rising gas prices. In addition, you want to be able to travel as a family every few months to get away from the rigors of routine life
- Insurance - for your car, home, property and life—no matter how inflated the premiums seem to get every year, you know that failing to protect your assets and your life with adequate insurance coverage means risking your peace of mind
- Emergencies - you need to always be prepared to handle the financial pressures of a medical, personal, natural disaster, or any other kind of emergency you are faced with
In spite of all these financial obligations you want to also make sure you have a certain desirable and satisfying lifestyle where comfort does not have to take a back seat. Over the years you have made some investments; some wise choices and perhaps some not so wise. Nevertheless, now is the stage when you want to ensure that your assets grow and your investments are optimized for the best pay off when they mature or when you need them to fund important events in the future.
So how can you do this? There are a few fundamental criteria you can aim to fulfil in this wealth accumulation phase of life:
- Try to ensure that your net worth exceeds 3 times your annual income
- Upon the solid financial foundation that you created in the early years, start diversifying your investment and asset management strategy by looking at bonds and equities
- Acknowledge that as your wealth grows, so does your risk bearing capacity and it is possible to get a little more aggressive in your asset allocation
- You may start seeing that your interest earnings are slowly getting to be on-par or equal to your equities; so start saving more
So what are you waiting for? Get started today with no cost or obligation a FREE Financial Assessment from Plan & Act. Then, when you’re ready, we can work with you to create a personalized (and affordable) financial plan that maximizes your investments and assets in the wealth accumulation stage so you have a financially secure future and a comfortable, stress-free retirement.
* Plan & Act is a registered Fiduciary Financial Advisor. This ensures the financial advice you receive from us is objective, unbiased, and protects your financial interests.