After taking the time and making an effort to build your wealth and investment portfolio, you don’t ever want to have to start over. You have likely been working on your financial security since the moment you saved your first dollar. It doesn’t make sense that you would let your guard down and not do what is necessary to protect your hard work.
It’s never too late to start thinking about doing what is necessary to protect your wealth and investment. It’s just as important as trying to find ways to grow your wealth and investment portfolio. All of this is tied to you doing what you need to do to secure your financial future. To help in that regard, you might want to consider the following five tips for protecting wealth and investment management.
1. Avoid Debt
Every dollar you own is a dollar you have to subtract from your wealth. The first thing you need to understand about wealth is the difference between secured debt and unsecured debt.
Secured debt represents that you have an underlying asset that supports the debt. That’s a good debt if the asset (a house) is increasing in value. It also good debt if you use it to secure a necessity such as a car.
The debt you need to avoid is unsecured debt like credit cards. People tend to use credit cards as a means of improving their standard of living in advance of earning the income to do so. That’s never a good idea because that extra income might never come. As long as unsecured debt serves as a drag against your wealth, you want to avoid it.
2. Diversify Your Investment Portfolio
The economic and financial worlds we live in are highly unpredictable. Every investment someone makes is subject to some level of risk because of factors that are out of the investor’s control. That’s exactly why professional investment advisors like a Blackburn Victoria financial planner will highly recommend investment portfolio diversification.
By most accounts, you should develop at least three different investment baskets. Your choices would include standard interest-bearing savings, stocks, bonds, trust funds, precious metals, and real estate. You don’t necessarily have to put equal portions in each basket, but you should at least make an effort to equalize the risk of each basket. The thought behind this process is that you want a portfolio where at least one basket is performing well regardless of the economy and financial factors.
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3. Protect Your Health and Assets With Insurance
The most valuable things in your life are your health, family, and your assets (wealth). After all the hard work you have done to build these things up, it makes no sense why you would not use insurance to protect them.
More than a few financial futures have been destroyed by health issues or a house burning down. As far as your health is concerned, one significant health issue could destroy your wealth. You need healthcare insurance not to protect you against the flu, but to make sure you can afford heart surgery without depleting your wealth and investments.
Home insurance? There is a reason most lenders require homeowners to carry homeowner’s insurance. No one can afford to watch an asset go up in smoke with no recourse.
4. Protect Your Family’s Wealth
Imagine a scenario where you work hard to build wealth for your family, and you suddenly die, which results in your wealth going to the government. That’s a very real possibility if you fail to create a family trust or will. You have a responsibility to protect your wealth and investments for everyone who is important in your life.
5. Seek Professional Advice When Necessary
It’s hard for anyone to have adequate knowledge about every aspect of life. People don’t naturally come by the skills to become an astute investor. Nor do they learn these skills in school.
If you don’t believe you are the best option to create the best investment portfolio possible, you should enlist the services of a professional investment counselor. Their wealth of knowledge and experience should serve to give you peace of mind that your financial future is in good hands.
