Many people think that wealth is essentially dollars and cents, but that is only part of it.
Wealth is really anything that brings value. Yes, wealth is the money that you have saved in the bank or in a retirement plan, but wealth can also be less tangible as well.
Your wealth is as unique as your skill set, because your wealth CONSISTS of your unique set of skills. Your wealth is your earning potential based on your abilities and skills.
There are three components to overall Wealth Management : protecting your wealth, acquiring your wealth, and transferring your wealth.
You acquire your wealth through your income earned. That income can be in the form of your paycheck or through capital gains or interest made from your savings and investments. But, what would happen if you suddenly were unable to continue to acquire wealth through an injury or catastrophic event? That is why wealth protection becomes so important.
You protect your wealth through proper insurance policies. For example, let’s say that you are a surgeon and something happened to your hands that prevented you from performing surgery (either temporarily or permanently). You should have a safeguard in place to provide a means to still receive money from all that loss income. You should have a disability insurance policy or other wealth protection mechanisms in place to protect that wealth.
Similarly, having a life insurance policy allows your family to continue to acquire wealth after the event of your death. You may not be here to provide, but your well-thought-out policy will.
You transfer your wealth with a detailed estate plan which will lessen any tax burdens on your loved ones. This plan helps with personal decisions – end of life directives, wills, etc – as well as financial ones as well.
Clearly, your wealth involves so much more when you begin to realize all that you are worth.
So, take all the necessary steps to properly Protect, Acquire and Transfer your wealth throughout the many stages of your financial life.