Personal wealth management is about making provision – before and after your retirement - for your comfort and chosen lifestyle in retirement.
If you have visited some of the pages on this Web site you'll know that providing for your retirement takes a lot of determination and dedication. When you approach or achieve your retirement provision goals, it is time to consider your wealth management.
Financial Asset Protection
Ideally your portfolio should be structured for capital growth and cash-flow. But in the current financial investment climate capital preservation or financial asset protection is the priority. It might mean downgrading your retirement lifestyle temporarily until your portfolio earnings have recovered.
Let your Cash Work for You
That is easier said than done! In the current financial investment climate we have such a lot of uncertainties that cash is considered the safe haven of choice. An independent, qualified, and experienced financial advisor could be invaluable in diversifying your cash reserves. Different currencies, money-market instruments, and precious metals are a few possibilities. Below we discuss some ideas around risk and return.
Provide for Your Retirement Cash-Flow
This is something that should be part of your portfolio management – when withdrawals will take place. The ideal would be that the cash is funded by the earnings of your investments. Only in extreme cases should you draw from your capital held in cash.
Minimize Your Taxes
Taxes are always with us. It can take away a substantial portion of the earnings of your portfolio. Your financial advisor will be an informed source on strategies for the avoidance of taxes on your investment income.
Minimize Your Investment Expenses
Many investments carry hidden expenses that only become apparent when you withdraw funds. Few of us who are not financial advisors can keep track of these hidden expenses. That's another reason for using an independent, qualified, and experienced financial advisor for your personal wealth management.
Risk – Return
In simplified terms are investments in bonds at the lowest risk and investment in equities or stock at the highest risk. The average rate of return tends to increase over longer periods of investment. Your so-called risk tolerance determines what your investment spread should be. During the run up to retirement you can be mildly aggressive in your risk tolerance by investing up to 40% or more in stocks, but by the time of your retirement, and this is only my opinion, you should go conservative and not invest more than 20% of your portfolio in stocks.
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