Financial Advice for Everyone
Financial Planning isn’t just for the rich.
If the past two years have provided us with any key takeaways, it has certainly given us an important lesson about money and personal finance. First of all, you never know how much you may end up needing if a worst-case situation arises, such as losing your job (or a global pandemic), and secondly, it’s never a bad time to start focusing on building your wealth.
Important to note is that wealth management isn’t just about intelligently managing the wealth you’ve built — that’s only the second part of it — the first part is building that wealth so that it can be managed.
There’s a popular misconception that financial planning and wealth management is only for those who have the wealth to manage; it’s not. The truth is that it is a worthwhile activity for anyone who actively aspires to build and gain wealth, no matter what your current financial position.
To give some context, according to the Global Wealth Report conducted by Credit Suisse, as of the end of 2020 there were just over 20 million people in America with a net worth of 1 million dollars or more. That’s out of the over 300 million people in America, giving you roughly only 6 percent of the population who could be considered “wealthy”.
As for the rest of us, close to 55 percent of Americans do not use a budget to manage their hard-earned income, and a similar 56 percent say they don’t even know how much money they spent last month. So whether you have designs on becoming a millionaire or just have your sights set on living a life free of financial stress and worry — there is still a lot of work and smart things that can be done to improve and manage the money we earn.
To begin with, the improvement of one’s financial literacy is never a bad idea. Americans don’t fare so well with financial basics. 21 percent of Americans have no emergency savings, they pay on average close to $600 in late fees, overdrafts, and other fees, and about 75 percent of teens don’t feel confident about their financial education.
Learning and applying financial planning fundamentals cannot be overstated in their efficacy. By merely applying the basics of budgeting, savings, and so on, will put you more in control of your money and will shift the dynamic to being (even if only a little bit) in a causative position where you aren’t the victim of your finances.
Possibly the best advice for anyone looking to improve their financial situation is to act now. Don’t wait to make a smart financial plan, no matter if you’re living large with a healthy net worth, or whether you’re living paycheck to paycheck.
A financial professional can help you navigate the most basic and important areas, from making a budget so you can control your spending, to saving for the future and making informed choices to protect and grow your financial well-being.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances.
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