With all the changes we've experienced in our economy in the past few years, you may be feeling slightly uneasy about your own wealth management plan. While no one can predict the future, just assessing where you stand now can provide some sense of relief. Here are some suggestions on how to do so.
Calculate Your Assets and Debts
Start by tallying your assets — bank accounts, investments, retirement accounts, real estate, business interests, etc. Then calculate what you owe to others — mortgages, equity loans, auto loans and credit cards. That way, you'll have an up-to-date snapshot of your current financial picture. From there, you can make decisions more readily. Perhaps there are loans you can pay down quickly (credit-card debt is typically the biggest culprit of them all). Perhaps you need to move your investments into new areas. A financial advisor can help you make these decisions.
Deciding between Every Day Needs versus Wants
In our highly consumption-focused society, it's easy to become too dependent on items we at one time viewed as luxuries or even frivolous expenditures. As with the above task, make a list of all of your monthly expenses and start to identify areas where cuts can be made. For example, while food is essential, maybe you should reduce the trips you make to that gourmet food store. Maybe you don't need 200 cable channels or a hefty list of features on your cell phone plan. Whether you keep spending money on these expenditures or not, a complete picture will help you decide areas of less importance where you could cut back.
Tax Planning
A variety of do-it-yourself tax kits help you go through a sometimes-stressful process more quickly and easily. But is a "one-size-fits-all" system the best option for you? Perhaps working with a certified public accountant can help you discover ways to cut your taxes that you did not know existed. Many find that the money spent to hire a CPA over time more than pays for itself.
Outline Financial Goals
You may have discovered that your plans for retirement won't pan out as you had envisioned decades ago. The painful first step may be to face the reality that this challenging economy means adjusting your goals and perhaps changing your investment portfolio. Meet with your advisor to see what makes the most sense in your situation.
Then, using some of the ideas in this article for inspiration, you may find that you can adjust your lifestyle in a way that isn't nearly as disruptive as you might have imagined.
This article is provided by James E. Elvord, AWM, a Financial Advisor at RBC Wealth Management in Chicago, and was prepared by or in cooperation with RBC Wealth Management. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance. RBC Wealth Management does not provide tax or legal advice.
RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC
James E. Elvord, AWM, Financial Advisor, RBC Wealth Mgmt., 312-559-1738 or 800-683-3246, james.elvord@rbc.com .
