How to Set Your Wealth Goals

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An important part of designing your investment and retirement strategy is deciding exactly what your wealth goals are. You’ll want to determine how you plan to spend the money that you save or earn through investing later in life.

Some individuals may seek to set higher wealth goals as they will want to continue to have a certain lifestyle in retirement, while others may feel they won’t need as much money. Follow these steps when determining the personal wealth goals you seek to achieve:

Set Savings and Investment Goals

One of the best ways to maximize your wealth is by setting goals. You’ll want to establish a monthly amount that you choose to save, as well as one that you use for investments. To maximize both, you’ll want to live below your personal and business means.

Reducing your means includes cutting expenses that aren’t necessary. For example, you could downsize your housing expense by living in a smaller residence or in a less expensive area. You can reduce transportation costs by using public transport or purchasing a used vehicle with cash rather than taking on a loan.

It can also make sense to minimize expenses related to dining out or other entertainment in favor of putting more money towards your savings and investments.

Seek New Growth Opportunities

Make an effort to pay attention to the stock market each day, as well as look for new opportunities to enhance your investments. If you run a business, seek to effectively increase revenues by selling new products or services or marketing older ones more efficiently. There are millions of ways to enhance growth if you look for them.

Another method of finding new growth opportunities is through effective networking. Join local clubs or groups full of like-minded investment gurus and business owners. These people are typically very interested in pursuing new opportunities, and they may advise you of options or investments that you aren’t aware of.

Don’t Volunteer to Pay More Taxes than You Owe

Taxation is a complicated issue, and there are many strategies and options available to reduce the amount of tax that you pay. You may be able to claim certain exemptions that you aren’t aware of, or there may be business deductions that you can use if you meet certain qualifications.

Engaging in the services of a qualified and knowledgeable tax advisor can help you to realize the benefits that are available to you. When you search for a tax advisor, make sure that they have experience in advising clients who are in similar situations to you.

For example, if you own a business, you’ll want to ensure that your tax advisor is knowledgeable about the type of business structure that you own, whether it is an LLC, corporation, or partnership. Individuals who regularly invest their money in a variety of investment products will want a tax advisor who specializes in investments for taxes.

Mitigate Market and Inflation Exposure

When structuring your investment portfolio, you’ll want to include a variety of different products that can mitigate the risk of losses from swings in the market. These options may come with certain tax advantages as well. A few options include:

Precious Metals

Precious metals include gold, silver, platinum, and palladium. Each of these metals may be purchased on its own or through stocks or ETFs.

Investing in precious metals is a great way to hedge against inflation, as their value typically rises at a rate that is at or above the rate of inflation. These types of investments often don’t flow in the same direction as stock or bond markets, which allows for greater portfolio diversification.

Fixed Index Annuities

A fixed index annuity is an excellent way to manage potential exposure to changes in the market. This type of investment product is purchased from an insurance company and allows for a regular stream of disbursements according to the terms agreed upon between the buyer and the insurance company.

Fixed index annuities also allow for potential growth since they are tied to a specific market index. If the market improves over time, your disbursements will also increase.

Bonds

There are a variety of different bond products on the market. They may be purchased from local, state, or federal governments or from corporations. Bonds have a variety of different features that allow for portfolio diversification depending on the type of bond that is purchased, as well as its terms.

Keep It Simple — Complicated Is Not Better

When you have established your wealth goals and are planning your investment strategy, remember to keep it simple.

You’ll want to regularly monitor your portfolio’s performance, and that will be hard to do if you have a variety of different investments that you must track. Instead, aim to have a designated investment strategy that you follow regularly.


Written by Ty J. Young.
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