A wise and generous man once said, “Riches are what you have, wealth is what you give.”* In the context of this blog, we understand that quote to mean that curating a wealth management process will involve more than just personal accumulation: ultimately, wealth management is about the legacy you leave for others.
At Iron Point Financial, we want to help you grow, steward and channel your resources in a way you can feel proud of. Everyone has one life — and one life only — to live, which is why we want to help you live it well: with a sense of meaning, purpose, and connection to your community.
But in order to look after the people and causes you care about, you need to have something to give in the first place, which is where our suggestions on how to simplify your finances come in.
If you take one thing away from this article, we hope it is this: once you have a clear sense of who you are investing for, and what really matters to you, you will have a “financial compass” to simplify and guide your wealth management decisions.
In other words, your “why” and “who” will determine your “how” and “what”…
1. Understanding Your Financial Goals (The Why)
Trying to navigate the maze that can be personal finances with simplicity may feel like a reach to you right now. But here are two categories of questions that can help you get started with uncovering the purpose behind your investments, debt management, and other financial planning needs.
What gets you up in the morning?
- What do you feel excited about each day?
- Who are you looking forward to seeing?
- When do you feel most energized and alive?
Everyone’s answers to these questions are likely to be different. For some, the thought of seeing your children or grandchildren succeed might be your highest priority.
For others, it could be seeing people’s lives changed through a charitable cause or movement you hold a deep personal connection to.
And for others still, it could be the feeling of making your work environment a healthier, happier place to live: making sure your coworkers and employees feel focused and free to dive into their work.
Whatever comes to mind for you, take note! The more you gain clarity about what excites you, the more you can plan to funnel your assets towards goals that serve those outcomes.
What keeps you up at night?
- What are you most worried about?
- Who are you most concerned for? Why?
- What kind of emotions come up for you around difficult topics?
When people take the time to pause and reckon with the things that make them uncomfortable and even anxious, they can learn something valuable.
As you think through these questions, you might feel distressed about impending payment deadlines, or about a family member who has made some bad life decisions.
You might be concerned for your health or for the well-being of someone close to you. You might even fear for the environment and the gradual destruction of shared natural spaces.
Just as it can help to become aware of what most excites you, it can also help to come to grips with your hidden pain points. These can be equally valuable for you as you if you connected them to your wealth management process.
Connecting these Questions with Your Wealth Management Process
Armed with fresh insights on the full spectrum of your joys and worries, you can start connecting your inmost desires with practical wealth management outcomes, including:
- Setting up the right investment vehicle (e.g. a SLAT trust to look after your spouse);
- Starting an education fund for your children or grandchildren (e.g. a 529 fund);
- Planning your long-term legacy through your will and other probate documents (deciding what you will leave behind, who you will leave it behind to, and how that process will play out.); and
- Establishing an emergency fund (so that you and your family will be covered if something unexpected were to happen).
There are plenty of other ways you could connect your heartfelt dreams with tangible steps in the wealth management process beyond these examples. Whatever you decide on, we suggest you do your best to keep the “why-to-what” connection strong.
Short-term? Or long-term?
Everyone’s inmost wants and fears are unique. And writing those out on a piece of paper or a Word document could feel like an overwhelming process.
That’s why we would suggest you break them down into short- and long-term goals, as that will help you simplify your wealth management process.
Short-term goals could be something as simple as saving up for a family vacation next year; long-term goals could be things like sorting out your retirement options decades ahead.
Working out which category to fit your list items into will then allow you to estimate the specific monetary targets you will need to reach them, and give you an idea of the big-picture timeline without feeling lost.
S.M.A.R.T. Goals
Another way to think about creating a clear connection between who you are, what you value, and how you adopt a wealth management process that serves your needs is through S.M.A.R.T. goals (there are plenty of great, free templates online to help you with this).
S.M.A.R.T. stands for: “Specific, Measurable, Achievable, Relevant and Time-bound.” This goal-setting technique offers a strategic approach for your wealth plan and should help you to track your short- and long-term milestones more easily.
Using your S.M.A.R.T. goals, you can create an order of priority: you can decide which goals come first, which goals need the most financial attention, and which you can put on the shelf for later.
2. Aligning Your Income and Expenses (The How)
Robert Kiyosaki, author of the book, Rich Dad, Poor Dad, once said, “Always start at the end before you begin.”
After going through step one of our guide to simplify your wealth management process, you are now, hopefully, ready to begin: where step one was all about “starting with the end in mind,” step two is all about aligning your life with that future direction.
The foundations of every individual’s wealth management process are their income and expenses. At the end of the day, these are what will determine how successful you are in pursuing your goals and fulfilling your wealth management “why.”
Techniques for Tracking Spending & Identifying Areas for Saving
There are countless free tools on the internet to track your spending items and habits. Many modern banks will even offer that kind of functionality automatically, alongside the personal bank account products they offer.
Elsewhere, on the Google Play and Apple App Stores, you can find free and premium offerings that will help you do the same thing, in a way you can take with you wherever you go (or, rather, wherever you can bring your smartphone).
These apps can categorize your spending for you along the lines suggested above (short- and long-term, S.M.A.R.T. goals, etc.) and they often come with simple spreadsheets to help you keep track of your income and expense data in one place.
Within the flow of this article, the point of tools like these will be to aid your intentionality: is this expense item serving one of my goals? How does it fit in my big-picture desire to support this person I love?
Using these tools for review purposes can help you to be hyper-specific in aligning your life now with the direction you want to take.
Simplifying Your Personal Budgeting Practice
If you want to take things a step further, you can use these same tools to automate your budgeting and free up your mental capacity to focus on other important life choices.
If, for example, you wanted to donate a certain amount each month to your child’s 529 fund, you could use one of these tools to achieve that goal. That way, the things that matter most to you can actually become second nature, quietly working away in the background.
Remember: one degree of change now (connecting one budget item on your spreadsheet to your deep wants and aims) may not seem like a lot, but in a year, you will likely be able to see how much that small tracking habit changed your overall direction.
3. Simplifying Your Investments (The What)
The quote at the beginning of this article signified that riches and wealth were not the same thing… but it also implied that riches could become wealth when applied correctly.
This idea — the idea that one thing can be transformed into something else entirely — is what investment is all about, and it is also why simplifying your investments is the third key stage of curating the right wealth management process for you.
In theory, investment takes the assets you already have at your disposal and puts them into a larger pool of assets that can then be directed for growth purposes.
When you consider that the success of your investments can impact the success of your values on the world (in how you apply the fruit of your investments), you can likely see how important they become to this process.
And yet there is an even deeper layer to investments, an even more meaningful perspective they can have as you work through your wealth management process: as an expression of your values in and of themselves.
Although it is true that most investments take place through the stock market, you could equally invest your capital directly, into specific businesses you believe in, or you could direct your investment advisor to invest only in stocks whose corporate, social, and environmental values you align with.
That way, you can be intentional in the way you manage your wealth at every stage.
For more on investment consulting strategies, why not check out our free resource here?
The Role of Professional Advisors in Investment
Sometimes, the goals you set yourself could be too complex to implement without the help of a Certified Financial Planner.
And sometimes, you may find yourself too busy focusing on what is really important in life (like spending time with your family or working hard to see your business succeed) to oversee your investments minute-to-minute.
Again, that’s where outsourcing your wealth management process to a professional could come in handy.
Tips for Finding and Working with a Financial Advisor
If you agree with the basic ideas put forward in this article — that wealth is ultimately about your legacy, and that making decisions with your legacy in mind can be done at every stage of your wealth management process — then you will probably want to hire an advisor who both understands where you are coming from and can put your values into practice.
Conversely. advisors who don’t take the time to listen to your unique needs and circumstances, but who instead offer one-size-fits-all solutions or products, are unlikely to be the type that you will be satisfied with in the long run.
Instead, financial planners who take the time to sit down with you, listen to your heart, and clarify what your life purpose is, are likely to be the right kind of professional for you.
As you communicate all the planning you have prepared in the stages above, they can listen and start to tailor their advice to fit your trajectory, rather than selling you a generic service that they will pocket a commission from.
There is even a word for this in the financial planning industry: “fiduciary.” A fiduciary is legally bound to act in your best interests — and this can simplify your wealth management process precisely by removing any conflicts of interest, and ensuring your stated direction comes first.
This kind of relationship with your financial planner — one where you start with clear communication and clear values, with someone who is committed to seeing them through — is also one worth revisiting. Regular check-ins can keep you both on the same page.
If this sounds like the kind of financial planner you would like to work with, why not reach out to Iron Point Financial today? We always make sure to sit down with you, listen to your needs, and plan out your ideal future together.
Parting Thoughts
“If you don’t stand for something, you’ll fall for anything.” So declared American Founding Father Alexander Hamilton. We think it fitting to leave you with these words as you seek to “found” your own wealth management process afresh, and establish the legacy of your dreams, for the sake of those you hold most dear.
With the right values in place, the intentionality to connect them to your present reality with clear goals, and the humility to seek help along the way, we trust you will be well-placed to ensure that your wealth plan stays simple today, tomorrow, and for the rest of your life.
All the best on the journey…
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Iron Point Financial is here to empower you to secure a brighter tomorrow. We operate physical offices in Grove City, PA and Greenville, PA.
We primarily serve residents of Pennsylvania, Ohio, West Virginia and Florida but we also have security registrations for 22 other states across the continental USA.
Further Resources
- Wealth Management Strategies
- How to Craft Your Legacy Plan (5 Actionable Steps)
- The Mystery of Unused 529 Funds (Maximizing Educational Impact)
- How to Leave Grandkids Your Retirement Savings
- How to Find an Investment Consultant: 5 Things to Look For
Disclosures
- The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.
- Due to volatility within the markets mentioned, opinions are subject to change without notice.
- Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.
- Past performance does not guarantee future results.
- Before investing, the investor should consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan.
- All investing involves risk, including the possible loss of principal.
- There is no assurance that any investment strategy will be successful.
*Mark Geppert, The Attack Lambs, p.248
