10 Financial Rules That Will Help You Build Wealth

Finding a financial organization and being on a path towards financial confidence with a plan that can allow for surprises caused by the economy, the markets or by personal life events is really what financial planning is all about.

We looked hard through our notes and through all of our relationships with clients to come up with a list of things that we find to be extremely important to understand and have in place in order to be on this path and we have listed them below.

1)    Make sure that what could affect you today is protected before you start planning for the future.

Create an insurance portfolio that has proper protection against loss of income, against premature death and also has an appropriate car, home and umbrella insurance in place.

2)    Have a short term liquid emergency fund in place.

 Create savings that are liquid and can be accessible without any tax penalty.

We recommend having 6 months to 1 year or living expenses saved up for in this area.

3)    Have a clear investment portfolio plan in place.

Makes sure that all of your investment accounts are not invested the same way.

You make have portfolios for retirement needed in 20 years and you may have investment accounts that are set aside for your kid’s college in 5 years.

Each account should be invested to fit the time frame of when the money is needed and make sure you understand the risk and volatility around each account that you have.

4)    Follow your very own specific financial plan and do not focus on what your work colleagues, your family members, and the media throws at you.

 Very often the media presents financial stories surrounding excitement and fear.

(The media need people to watch and listen) and very often your colleagues and your family members will have ideas and plans that they heard from other friends and chances are good that it will not fit into what you are trying to accomplish.

5)    Understand the real rate of return you are getting on your overall financial plan.

It is important to understand the fees and tax cost within your portfolios but it is even more important to understand the real rate of return you are getting your full financial plan.

So make sure you don’t look at rates of return within a vacuum but considers, fees, taxes, time value of money and get a wide angle look at your returns.

6)    Always understand why you are doing what you are doing and make sure the financial plan fits your objectives and goals.

A financial plan that fits everyone, a financial plan without human interaction or a financial plan that does not address all financial domains is probably not a fit financial plan created to fit your situation and get you to your goals.

7)    Saving on a regular basis is more important than chasing rates of return.

Consistently and systematically saving is much more important than trying to chase greater rates of return projecting future goals based on some hypothetical rate of return..

8)    Understand how each of your accounts is taxed today, how they will be taxed in the future and make sure you understand the rules around each account in regards to when and how you are allowed to take withdrawals.

There are many different types of accounts.

Some are tax-deferred, some are ongoing taxable and some are tax-free or maybe a combination.

Get a clear understanding of how your accounts are set up.

9)    Retirement is a very different game than accumulation so understand the new factors that will affect you in retirement.

 The sequence of returns, unknown duration of retirement, income for surviving spouse, a legacy for grandkids and many other topics should be part of a retirement game plan.

10) Get rid of short term debt that is not deductible.

Understand the difference between “good” and bad debt.

Credit Cards, student loans, car loans and personal loans can be devastating to your financial life so have a plan on how you will pay off these loans.

But don’t just pay them off as fast as possible without doing an overall analysis of your finances.

There are more areas that should be addressed by a financial plan but these are some very important topics that you can look at to see where you currently stand with your financial plan.

And remember there is not just one correct way of getting a financial plan done and different situations require variations.

Most important is to be part of your plan and to understand why your planning is done the way it is.

Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
This material contains the current opinions of the [author/presenter] but not
necessarily those of Guardian or its subsidiaries and such opinions are subject to change without

Written by CreativeNurse Team

2016-22956  Exp. 5/18