5 Must-Know Tips for Successful Wealth Management

Whether you are just beginning to put your investment portfolio together or are looking for ways to enhance it and maximize your return, careful wealth building planning is key. This month, we heard from experts Arlene Alvarez, CRC, who is an Independent Financial Advisor at Raymond James, and Doris Neyra, CFP, Wealth Advisor and SVP at Wells Fargo, on how to successfully and securely build wealth. Here are a few key takeaways from our most recent Just Ask TCI discussion.

1. Be Consistent

Both Arlene and Doris emphasize the importance of consistency and gradual wealth building. “Think of it like a diet,” Arlene says, “and build wealth little by little, gradually growing and gaining momentum as you go. Eventually, you get to the point where it’s growing on its own.”

Even if you’re only able to invest or save a small percentage of your income each month, set an amount that works for your current situation and stick to it.

2. Get a Great Advisor

Having a trusted, knowledgeable financial advisor on your team is invaluable when it comes to wealth building and financial planning. There are many different ways to invest your money, including stocks, bonds, structured notes and even real estate, and each comes with its own benefits and risks.

Arlene recommends structured notes, which are like bonds that you earn interest on, but they guarantee a certain amount of principle. As long as the stock is not down by more than 50% after maturity – which is usually three years ­­– you get a return. “A lot of banks offer these types of notes,” she says, “but a lot of people don’t know or understand them.” Having a great advisor can open so many more doors that you may not have realized were available.

3. Set Goals

Ask yourself, “What does wealth mean to you?” Does it mean having X amount saved for retirement? Maybe it means financial freedom or having the ability to travel or help your family financially. Have a clear definition of what wealth means to you, then create your financial plan around that goal.

The following breakdown was shared during this month’s Just Ask TCI virtual program has one suggestion for structuring your own financial plan:

• Save 10% to 15% of your income in the most tax-efficient way possible
• Spend 70%
• Give 10% to charity
• Use 10% on personal development and growth

4. Know Your Risks

Most financial investments come with certain risks – some types more than others. Doris recommends always being aware of your risk tolerance and planning your portfolio accordingly. “It has been a bumpy road this entire year,” she says, “but market volatility doesn’t really matter as long as you understand 1) what you’ve invested in and that 2) it’s in line with your tolerance.” In a nutshell, if you can’t sleep at night because you’re worried about your portfolio, something needs to change.

Doris also stresses the importance of consistency and long-term viewpoints as essential to risk-management. “When you invest in capital markets in general,” she says, “you should be committed to at least one market cycle, which can be anywhere from 7 to 10 years. You can’t get emotional. Stick with it, add to it in bad times and over the long run, you’ll do great.”

5. Protect Your Financial Information Online

Not only should you protect your investments by understanding your risk tolerance, but also by maintaining safe and secure passwords for all online banking. Most experts recommend creating long, complex passwords and using password manager tools to help you keep track of them.

Doris shares a few of her top suggestions for keeping your financial information safe:

• Change your passwords every three months
• Check your financial accounts regularly
• Try to avoid writing checks whenever possible, and be careful about who you write checks to

Arlene’s number-one financial protection tip is to work with a reputable wealth management firm and be wary of “too goo to be true” offers.

Bottom Line

Building your portfolio is best done slowly and steadily, ideally with the help of a seasoned advisor. No matter what wealth management stage you’re in, it’s never a bad idea to revisit your investments and see if there are changes you can make to better your return in the long run.

Our next free and open-to-the-public Just Ask TCI virtual program will take place on Friday, December 4, 2018 at 12pm ET and it will be on the topic of “Social Media.” We’d love to see you there!