What is the difference between creating wealth and sustaining wealth? That question may seem simple on the surface, but in practice, there are many very smart business owners who don’t know the difference. In basic terms, creating wealth means taking on risk, while maintaining wealth is about diversifying and long-term strategy. If you’ve been lucky enough to have some money fall your way, whether it’s through an inheritance, selling your business or having some other major event occur, there are a lot of things to consider so you can maintain your wealth.
Establish Your Goals
Goal setting is an important aspect for all successful businesses, and the same goes for your financial future. Plan for the risk and make sure you understand the fees, taxes and inflation numbers that are involved as well. You can discuss your new goals with your financial planner as the two of you sit down to determine the best way to meet those goals. In simplest terms, you’ll want to put down on paper what it is you want to achieve.
Be Honest With Yourself
Today’s financial world is particularly difficult for anyone who is new to wealth and for new entrepreneurs who have stumbled into a financial windfall. You’ll also want to determine if you’ve got the infrastructure in place to help you with your capital. There is so much more to the process of maintaining your wealth than simply investing your money, so be sure to seek professional help when you can honestly say to yourself that you need it.
Manage Your Portfolio
Now that you’ve started investing, it’s time to start managing your portfolio. While running your business is something you can tackle on a daily basis, remember that managing a portfolio is a long-term process that involves a lot of waiting around. The temptation is to over-manage the portfolio and to increase risk a great deal, however that doesn’t always end well. Be smart, be patient and manage your portfolio wisely.
This article was written by Deborah Flomberg for Small Business Pulse