Wealth Creation Plan
Wealth creation is the result of financial strategies aimed at increasing the net value of your assets. Luckily for you, we specialise in helping ordinary Kiwis reach their financial goals and gain financial freedom.
Who Doesn’t Want More Money?
More money can mean better lifestyle choices, or at the very least, financial security. But true financial freedom is not achieved through simply having more money, it’s about wisdom.
Our wealth creation plan is the result of considered evaluation of your financial needs, assets, liabilities, and the opportunities available to build and accumulate wealth.
Any plan to optimise your wealth will include a strategy to reduce your tax burden while simultaneously protecting your assets.
If you’re new to the idea of financial advising or your current financial adviser isn’t meeting your needs, consider what MyFuture can do for you.
With our client-centred approach and financial expertise, we’ll craft a wealth creation plan together that prioritises your financial goals.
What Is Wealth Creation?
Wealth creation refers to building wealth through a variety of methods using proven strategies to help reach financial goals and is an essential part of a comprehensive investment plan.
Beginning wealth creation early and being disciplined over decades can lead to higher returns. What does this really mean? It gives you the financial freedom to live the lifestyle you choose.
Much like an iceberg, a wealth creation plan looks simple on the surface but 90% of the structure is intricate and requires heavy lifting. As with any financial management plan, wealth creation should be diversified:
- One aspect of it is a tax strategy which aims to reduce the amount you pay in taxes on the money you earn and hold.
- Another component is investment where the money you have earns or provides returns.
- The third component is debt management. Understanding the difference between good debt and bad debt and having the right debt structures to allow you to minimise your interest costs over time
These strategies are weighed against your risk profile and your personal timeline to ensure they properly align with your goals.
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Why A Wealth Creation Plan Is Important
Wealth creation has always been an important part of a financial plan. To reach your long-term goals such as buying that dream house, taking exotic trips, funding your child’s education, or setting yourself up for a fantastic (ideally, early!) retirement, wealth creation is a valuable part of your financial journey.
While most people have probably had a rude awakening as to how well prepared they are for unexpected circumstances in the midst of the pandemic, it’s never been more important to ensure your financial security.
Having a financial buffer for such times can provide the financial security you need, potentially even protecting you until retirement.
Understanding Your Financial Goals
A financial goal means a specific net value that you desire to help you reach your lifestyle goals.
These goals will align with your plans for the future and be sufficient to make them a reality. Your financial goals should align with your short-term, intermediate-term, and long-term goals, but also take into account your personal values in order to create a holistic financial plan. Financial goals are specific and measurable milestones that are not to be confused with a budget or a financial plan.
Financial literacy is fundamental in setting your financial goals. If you aren’t confident in your financial knowledge, that’s where MyFuture can help you comprehend the basics. We always try to educate our clients during our 6 step financial process so that you feel comfortable and confident in the strategies’ we recommend along the way.
Creating goals should always use the SMART technique:
- Specific
- Measurable
- Attainable
- Relevant
- Time-bound
For example, instead of making a goal to ‘retire early,’ make it a SMART goal: ‘have $80,000 passive income per year by the time I turn 55 years old’. The ability to monitor this goal increases your chances of meeting it.
When Should You Consider A Wealth Creation Plan?
Creating a wealth plan early becomes something you can cultivate throughout the rest of your life. Some people only focus on this as they approach retirement which means they have 30+ years of an under utilised investment window.
Your wealth plan will grow with you as your priorities change. The younger you start, the more time you’ll have to impact and manage your future wealth and the benefit of compounding interest can make a massive difference. With the help of our financial advisers, you can aspire to bigger and better goals while managing your risk over time. So what are you waiting for; get started today with a free Discovery Session.
What Is Our 6-Step Financial Advice Process?
The 6-step financial advice process is the international benchmark for financial planning.
This holistic approach is proven to increase the likelihood of you achieving your financial goals.
1
Establish and define our relationship with the client
We offer a no obligation FREE Discovery Session to get to know each other which can take place either online or in a location of your choosing. Within this free Discovery Session we take the time to get to know you, understand your current financial situation, and work with you to identify your hopes and dreams for the future – clearly outlining our services and fees and define both your and our responsibilities throughout the entire financial planning process.
2
Gather our clients data and familiarise with their goals
Next, we get into the nitty gritty of your assets, debts, income, and expenses and gather the facts to better understand what your current situation is, what you want to achieve, and what resources are available to help you accomplish those goals. Together, we will evaluate the time frame to start seeing results and reach your goals, as well as assess the level of risk you’re comfortable with.
3
Analyse and evaluate your financial status
We use our expertise to analyse and evaluate your financial status and ability to reach your goals through various options. Depending on what services your plan includes, this may include analysing assets, liabilities, cash flow, current insurance coverage, retirement planning, investment opportunities, or tax strategies.
4
Develop and present our financial plan recommendations
Our Advisery Panel develops a detailed strategy outlining how best to achieve your financial goals. Our recommendations will be presented to you in person. In most cases, there will be multiple options to consider to help you reach your goals. We will listen to all of your thoughts and concerns and make adjustments if necessary to meet your individual needs.
5
Implement our financial plan recommendations
Once you understand and approve the personalised recommendations and options, we then begin working with you to manage their implementation. This may involve connecting you to an appropriate professional at the right time to execute your strategy.
For example, if you require new lending or a restructure of your existing loans, we can either work directly with the Banks or we may determine that it’s in your best interests to introduce you to a specialist mortgage broker. If you need to buy, sell or hold managed funds or securities, we may connect you to an appropriately qualified adviser.
6
Monitor the implemented financial plan
This is where the real fun begins – managing and tracking your long-term financial success! We have periodic reviews to ensure that your strategy is still appropriate if your goals or circumstances have changed. We will also review the performance of your plan to assess the level of volatility and return and make sure you remain on track to achieve your short term, medium term, and long-term financial goals.
Build Your Wealth Creation Plan
What Wealth Creation Plan Is Right For Me?
We don’t want to take away your spontaneity and zest for life! In fact, our aim is to preserve and nurture it.
Building wealth isn’t about hoarding money and not enjoying it until you’ve hit your target. It is a mixture of enjoying life, spending wisely on what is important to you and challenging yourself to hit your mid-long term financial goals.
Think about what matters to you and focus on a spending plan that lets you pursue those priorities. When you stop spending on things that you don’t value, you’ll be surprised how quickly your wealth can grow.
Some useful strategies you can implement to generate wealth include:
- Pay off high interest debt
- Spend wisely
- Create an emergency fund
- Consider other revenue options
- Invest
- Start a business
- Generate passive income
What Is The Best Way To Build Wealth?
The basic formula for building wealth is to make more than you spend, avoid debt, minimise taxes, and invest. Of course, while the formula for building wealth sounds straightforward, it can be a challenge to implement.
Make money – While this may seem like common sense, it is fundamental to building wealth and worth emphasising. You can’t build wealth without earning money in the first place, so do the little things to invest in yourself and your earning potential. Then be proactive in pursuing a higher income so long as it aligns with your values and goals.
Your primary job doesn’t have to be your only income. You can increase your income with a passive income such as a side business, real estate rentals, or a hobby with income potential.
Save money – Set a monthly budget template and track where your money goes. This is one of the best ways to understand your spending and find alternatives or areas you can save. Think about what you absolutely need and what you can do without.
Invest money – Savings work best when they also generate income. With the help of a financial adviser, you can invest that money wisely. While we’d all like to find the next Google, Apple, or Facebook to make a killing on the stock market, smart investing is about being clear on what your long term goals are, having an honest assessment of where you are at now, understanding what the shortfall is then determining what asset class you need to be in to make up that shortfall.
It is also about understanding how to maximise your wealth creation potential using gearing strategies (borrowing money to invest) if the shortfall is too big to make up using any one asset class and of course, diversifying your portfolio and managing the risks you’re willing to take as you get closer to retirement.
MyFuture will work with you to identify opportunities for wealth creation. Spend 45 mins of your time today for a clearer path to financial freedom.
How Do You Achieve Financial Independence?
This is only the tip of the iceberg of all the possibilities for financial independence, but it is a useful place to begin. Book your free Discovery Session with MyFuture today so we can nurture your zest for life while helping you reach your long term goals.