There is a lot of advice being offered on the topic of personal finance. It can seem contradictory and often times confusing. The truth is there is no universal financial advice that applies to everyone equally, except perhaps to spend less than you earn.
What does it mean to be strategic in your wealth planning? Building wealth is about more than just money: it means making sure you get the most out of what you enjoy.
Having a wealth strategy is knowing where you want to go, how to get there, making sure it is done in a tax-efficient manner and that the details are handled in the way you want. Money is a means to an end and your strategy should include the major parts of your life: work, lifestyle, family and community. Proper wealth management is the big picture, financial planning is just one part of it.
For women entrepreneurs, being strategic about your wealth is especially important because:
There are several components to wealth strategy such as financial planning, investment/portfolio management, insurance, estate planning, tax planning and business succession planning. Most of these don't work in isolation so be sure to talk to the experts to make sure all the parts work together. Make sure the experts you hire can see the whole picture. For instance, if you are planning to pass your business to your child, is the process tax efficient? Do you need to review your insurance? How will your estate compensate your other children not involved with the business? Sometimes things that reduce wealth are from inefficiencies in the overall plan.
An important part of a wealth strategy is to have two streams of wealth creation: 1) the wealth created in your business; and 2) the wealth created from investing in other businesses. A lot of talk surrounds investing, how and where to invest. To have a good long-term plan there are a few things to do before you start investing in that second stream:
Creating a wealth strategy is a big process, but knowing everything is in order and having peace of mind is well worth it.