Financial Planning Tips High Net Worth Individuals Should Follow

By Author: Avendus Group
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Financial planning is paramount for wealthy and high-net-worth individuals. Since you’re likely to have a significant number of assets, it requires careful planning and monitoring. More assets also mean there is more at stake, followed by unique challenges that come with managing such huge wealth. Of course, you can work with some seasoned finance companies in India to ease things up. But taking care of some key things also helps you with financial planning. Below are such tips that wealthy people must follow.

Create a Plan

As you might have heard, the journey of a thousand miles begins with one single step. This phrase is applicable in every real-life scenario including wealth management. Only wishing and dreaming of things feels nice but that doesn’t help you get the work done. Therefore, it’s crucial that you start with a plan that caters for your assessor, investments, liabilities and future plans for your business.

When you have an all-around plan in place, it gives you a sense of clarity and confidence to make decisions related to money. It specifically ...
... aids in taking care of profits, debts and retirement. Since HNIs often have varied and big portfolios, they must consider working with a financial planning firm. From investment banking to succession planning, such firms can help you develop a foolproof plan.

Consider Your Retirement

There is this old-school norm that implies retirement should happen when you reach a particular age. However, new-age entrepreneurs think differently. They decide on their retirement based on factors other than age which include future commitments, sources of income, wealth goals and family planning, etc. Their age of retirement could be anything from the early ’30s to the late ’60s.

These days retirement is dynamic and it’s completely up to you. Also, it’s a given that you won’t be actively participating in business after you retire. So it’s critical that you have a plan to ensure a steady source of income even after you retire. You can start by penning down your expenses, take into account the lifestyle you’d want to have after retirement – it shall give you an idea about how much money you’d need and then incorporate the same amounts in your retirement planning.

Factor in the Succession Plan

The moment you are considering your retirement, it has to be followed by succession planning. When you’re thinking of leaving all the work behind, you must have also thought about how you would distribute your empire among your heirs. You can simply sit down and discuss things with your children or whomever the successors are, discussing the future with them shall help you make an informed decision.

Making unilateral decisions about something as crucial as business succession can lead to chaos. It may give rise to disagreements amongst heirs or family members and potentially ruin all the peace you wanted after retiring. It’s always a wise idea to decide who will get what part of your wealth to ensure a smooth succession.

Train Your Future Generation

There’s no doubt that you have worked immensely hard to reach where you are. It must have been a journey filled with endless sacrifices to make sure you accomplish your ambitions. If you have children, then you must’ve gone out of your way to provide them with everything. Especially when you don’t come from an affluent background already, you try to safeguard your dependents from all the hardships you went through.

While this concern is justifiable, constantly protecting your children might work against you. It’s crucial that you train your kids to look after themselves and earn a respectable living. When you retire, you might not be in a position to pamper your kids the way you did earlier. And even when you’re not retired, you shouldn’t overly pamper your dependents because it will eventually increase your financial burden. So train them and turn them into self-dependent individuals while you can.

Comprehensive Wealth Planning

When you make more money, managing it keeps getting more and more difficult. That’s when HNIs should think about working with a financial planning firm that caters to all the aspects of your wealth. From asset management, investment banking, succession, merger and acquisition – basically everything related to your financial planning. A good wealth advisory also takes care of legal aspects and things like structured credit. Having a comprehensive plan helps you make sound decisions about your wealth.

To Summarize

Having a robust financial plan, retirement planning, succession planning, training your children and working with a finance company in India that offers comprehensive solutions are some key things high net worth individuals should follow.