Would you like a simple personal wealth management tip that will help you achieve your financial goals while enjoying life along the way? Start from the top when it comes to your money and your life! Your income generation and your investing are both major elements of your own wealth creation, but the two are usually out of balance when it comes to time and attention. It’s easy to get lost in the day to day elements of your job, or your own business, if you happen to be an entrepreneur, like me, but the reason we work is to achieve financial freedom ultimately.
Personal Wealth Management
Here’s how this plays out in my life, and my own solution, with the intention that it will help you, too. At this point, we have several small businesses, including 2 financial education online businesses, a small business management and marketing consulting service, a products company and we own several real estate rentals. (It’s a lot, but we have a great team to help us.) Now, the thought of sharing what I have learned in over 3 decades to help others excites me, and I can get completely lost in this pursuit while losing site of my goals, so here’s what I do.
At least once a quarter I force myself to sit down for a bit of my own personal wealth management while taking a big picture look at our net worth. This removes me from the day to day tasks of income generation. It’s easy to get lost in the constant allure of the creative elements of your business or career. For me, that includes any form of teaching, outlining ideas for products and services on my big office white boards with colored markers, writing articles (and books!) and recording videos in my modest home recording studio with my cool new camera. But then there’s also the management, technology, and the grind. I can’t spend all of my time in either, and neither can you if you want to reach your financial goals.
If you work for someone else, your time may be swept away similarly, year after year, while delaying that next degree or certification that would allow you to earn more, adequately overseeing your investments, or even starting your own business. Not only this, but you’re building an asset for someone else from your work efforts, so you’ll want to be certain that you are also building your own assets in the form of investments!
The Big Picture
To keep me on track, I keep a list of the big picture questions that inspire me to focus on the best use of my time and resources. These questions apply to any type of investment, which I encourage everyone to think of as the totality of their assets. Since time is your most valuable asset, it must be thrown in the mix, as well. Plus, many proactive investors have different types of assets, especially in the second half of life. This big picture wealth management strategy is outside of, but may align with, typical financial planning or advisor services. Here are some of the questions I ask that you may want to consider once you’ve totaled your net worth:
How much did the value of this asset increase or decrease and why? Did we spend this money, move it to a different account, experience capital appreciation or did we use it to invest in a business or other asset?
What is our long term goal for this asset? Is our goal for it to increase in value over time, position it for income, or sell it? Are we taking action aligned to that goal? For example, if the goal is long term appreciation, has the asset class, such as the stock market, increased in value significantly and dis proportionally over the past year or two? If the answer is yes, should we sell it? If our goal is income generation, are we getting it? How can we get more? If our goal is to sell the asset, such as a business, or a rental property, are we positioning it to sell?
How much time does this asset require? Is it taking too much time based on our financial objective? Do I enjoy it? Online and consulting businesses, especially those that you love, can steel away all of your time to the extent that your overall goal of wealth creation gets lost. On the other hand, five or ten hours a week strategically allocated to consulting can significantly boost income.
Or are rental properties constantly demanding attention, distracting from higher level activities? If so, can management be delegated, or is it a good time to sell the properties?
Is proactive investing making money? Or am I worrying too much about an investment, which can be a distracting energy drain vs. a time drain. What actions will make me more secure around that investments? Education? (For you, this may include closer tracking of that investment, or connecting with your financial advisor?)
Could you be so busy with another element of wealth building, such as your job, you never seem to get to monitoring or truly understanding your investments as closely as you want? This dangerous distraction can completely sabotage why you’re spending so much time working in the first place.
Maybe most importantly, are you enjoying what you spend much of your time doing? This is usually some form of income generation from a job, investments, or small business.
Take a big picture look at your assets, time and life at least once a quarter to make sure each is aligned with your long term life and financial goals. If they’re not, put them in alignment based on what you want in your life. Lead your life and your money with your own personal wealth management brainstorming template.