To manage wealth well, it may help to have a financial plan. Although there’s no one-size-fits-all approach to building a wealth plan, most of them take several factors into consideration. 

In a nutshell, a wealth management plan can help affluent people manage, preserve and transfer assets and resources over time.

By understanding your primary goals and exploring a few common wealth management strategies, you may cultivate better peace of mind about your own financial plan. You also may find ways to preserve and transfer accumulated assets, save for retirement and college, and manage market volatility with more confidence.

Goals

It’s natural to have more than one financial goal set for the road ahead, especially if you’re someone who wants to live life on your terms. And many people find it helpful to put pen to paper to sketch their goals and objectives out.

For instance, you might jot down something as simple as “save for retirement” or as detailed and ambitious as “save enough money to transition to a work-optional lifestyle by age 50.” Or "leaving a legacy" might be at the top of your list.

A wealth management plan can help address those goals and other financial objectives, such as streamlining an investment portfolio, tackling cash flow issues, and pursuing advanced tax management strategies. You might be able to put money in reserve to help you navigate future market volatility, too.

» Insight: Financial goals and objectives are deeply personal, and the strategies to advance them can be tailored to reflect individual needs, too. After all, someone who’s building a business and saving for a lavish retirement at 65 might have a different risk tolerance and strategy than a person who wants to retire at 60 and live modestly. In either instance, a wealth management team can help.

Retirement planning strategies

Even if you have a 401(k) through your employer or are a business owner contributing directly to traditional individual retirement accounts (e.g., SEP-IRA), your wealth management plan could include additional retirement planning strategies and solutions.

And don’t forget that self-employed individuals and small business owners have specific options available to them, too, as do stay-at-home spouses.

If desired, a financial advisor may be able to help you tackle retirement planning while also addressing concerns about your current income tax burden. (More on tax management strategies in a moment!)

Budgeting and cash flow management

Preparing for the future is a big part of any wealth management plan. But there may be issues to tackle in the present, too. A good place to start is by taking a close look at how money flows into and out of your life.

Early in your wealth management journey, your financial advisor may invite you to share typical monthly expenses and income. A budget spreadsheet can be a simple reference point for future conversations, too. This type of budgeting is different than cash flow, however, which involves determining how to allocate your resources to specific priorities tied to your goals.

A more sophisticated strategy, cash flow management touches upon financial principles like compounding interest. It may extend to refinancing a mortgage, reducing credit card balances, auditing expenses to eliminate unnecessary ones and setting aside money for indulgences (e.g., fine art, extravagant trips or vintage cars).

Sound cash flow management practices might also help you navigate market volatility with more confidence, too.

» Insight: While budgeting is something that most people grasp, robust cash flow management strategies arguably are more in line with behaviors typical of a millionaire mindset.¹

Education costs

For most of us, college is the largest child-rearing expense that parents face. That’s why families are encouraged to start saving when their children are young. An advanced college savings strategy² might go beyond putting aside a little money each month.

Depending on the number of children you have, your projected income over time, and tuition at the schools they’re most likely to attend, your wealth management team may recommend a mix of education-specific accounts alongside other strategies.

And don’t forget the educational needs for the grownups! Have a stay-at-home spouse who plans to return to school for another degree? Or do you hope to pick up additional certifications or credentials to advance your professional career? Although a traditional college savings plan might not work in these instances, a wealth management team may have solutions.

A financial advisor could also help you puzzle through how you might navigate a temporary drop in annual earnings if, say, you wanted to pick up an MBA.

Tax management strategies

Worried about estate taxes for your heirs or if you’re paying too much in federal taxes? Consider pursuing tax optimization³ as part of your overall financial plan. Working with a tax professional (e.g., tax attorney, CPA or accountant), you can address year-to-year tax planning in ways that reflect changes to your income, family status or the federal income tax code.

As you build out a wealth management plan, be sure to seek out a financial advisor who is willing to integrate their efforts into the work already underway with your existing tax firm. If you’re not already working with a tax pro, your wealth management team can provide recommendations.

Business succession and exit strategies

Are you a business owner, partner or major stakeholder in a company? If so, you might want to consider crafting a succession plan to protect your business-related assets as well as the business itself.

Succession planning can require some heartfelt conversations with people close to you, both professionally and personally. You’ll want to consider whether your successors are genuinely interested in taking over and have the ability to do so. Again, your financial advisor can be a sounding board. They can also recommend a business attorney or tax professional to help you craft the documents you’ll need.

» Insight: Plan to sell your lucrative business sooner rather than later? Consider crafting an exit strategy that honors your professional work and advances your financial goals.

Advanced insurance strategies

Life and long-term care insurance may not seem relevant to wealth management. In some instances, however, they can prove essential.

Consider a situation where one spouse earns a hefty salary annually while the other completes school, raises kids or launches a tech startup on a shoestring. Life insurance could help provide for the family if the primary breadwinners were to pass.

For more mature adults, long-term care insurance can help cover the rising costs of health care while potentially protecting assets that you’d prefer to go to beneficiaries.

Estate and legacy planning strategies

Estate planning⁴ may seem like a matter separate from wealth management. In reality, your estate plan can be the apex of your wealth management plan.

More than that, by preparing a will, trust, advance directives and other documents related to the end of life and the transfer of assets, you may relieve yourself of stress you didn’t realize you were carrying. Having a conversation with loved ones about your legacy objectives can prove fruitful, too — yes, even if it feels a little awkward at first.

A carefully crafted estate plan can also make life easier for your surviving family members at a time when they will need ease the most. Plus, if you also nurture a relationship between your family and your wealth management team, you might shore up confidence in your heirs about their next steps, especially when the time inevitably comes for them to address their financial affairs without you.

Cash reserve creation

Even if you have plenty of money available, you may still desire an emergency fund, or a cash reserve,⁵ to cover large, short-term unexpected expenses without selling investments or taking on debt.

» Insight: Wealthy investors with higher risk tolerance may also want to consider creating a special cash reserve to address stock market volatility and other big economic shifts.

Debt management

If you have debt — and most of us have some degree of it, your wealth management team can help you create a plan⁶ to manage it more mindfully. Plus, they can help you determine if it makes financial sense to take your time addressing it or to pay it off quickly.

Providing your financial advisor with an accurate picture of your debt also lets them correctly calculate your net worth and financial projections. Put it all on the table when you talk. Your wealth management experience likely will be more effective and realistic if you do.

The takeaway

Although we’ve summarized some common elements in this article, your personal wealth management plan may include other elements, depending on your assets, goals and lifestyle. Once you establish a plan, keep in mind it will need regular reviews and updates to reflect your stage of life, family changes and market shifts.

Ready to explore wealth management strategies and solutions that meet your unique needs? RBFCU Wealth Management, The Garner Davis Group can help you work toward refining your financial plan to support personal and professional goals.