Wealth Management My Personal Wealth

Wealth Management My personal wealth plan is focused on a number of factors that I believe will take place throughout my lifetime. These factors concern my career choice, my lifestyle choices and my retirement goals and objectives. Knowing and understanding how to reach those goals and objectives (at least financially) provides me with the pathway I need take in order to achieve the most effective results.

With a comprehensive knowledge of the various financial tools available to me, I make the choices that seem to me the most appropriate for achieving those life goals. Currently I am a college sophomore with approximately 2-3 years of schooling ahead of me before I can even think about setting aside a portion of my income for savings and investments, especially since I am essentially living off the good graces of my parents and the government in the form of student loans and grants.

Having accomplished my short-term goal of graduating from college, my financial plan will then be fully implemented. Until that time, I live frugally on meager earnings. Once I have graduated I plan on landing a job in the field of my study with a starting salary of between $40 - $50,000 per year. I understand that the job market is currently a wasteland of extreme proportions but with my acumen and suave nature it should not be difficult to land a job even in this tough environment.

With monthly earnings of approximately $3,500 - $4,000 the plan is to save and invest at least 10% of my gross earnings. Putting aside $300 per month (on the low side) should allow me for a long-term average return of approximately 10%. Historically speaking, 10% is what equity investors have achieved (average) per year. With that type of return, my investments will double every seven years. If I begin work at the age of 23, by the age of thirty my savings will have grown to approximately $35,000.

I plan on being married and starting a family by that time, and with that will come adjustments to my income and spending habits. I will now be responsible for other family members and their needs. Things such as food, shelter, clothing and recreational activities all come to mind when thinking of familial needs. Those items cost money. Therefore my savings rate will remain constant on a dollar basis, but not necessarily on a percentage basis.

Since a seven-year period has elapsed since I was first hired, my responsibilities at work have changed and are more onerous. My pay has increased as well and I am now earning over $70,000 per year. My investments and savings have grown to $500 per month. My next milestone is 37 years of age, until that time I leave my investment strategy the same (aggressive growth with little fixed income investment vehicles). I am still looking to achieve my 10% rate of return per year.

When I am 37 years old, I check my investments and discover that I now have a portfolio of approximately $128,000. During the preceding 7 years I have fathered three children (two boys and a girl) and they are now at an age where the private schools they attend are costing me an arm and a leg, the house my spouse and I purchased is quite extravagant, and the two cars, insurance, and other of life's amenities are all crowding in on the investment picture.

For the next seven years I decide to forgo the monthly investments, but decide not to change the initial investment strategy. The next 7 years pass by and I am now 44 with gray showing in my hair and small wrinkles appearing about my eyes. I check my investments and discover that the 10% rate of return has held true and because of that my investment portfolio is now at a quarter of a million dollars.

I seriously considering running off to the Bahamas for the rest of my life, but decide instead to stick it out. At this time in my life my career has rocketed forward and I am now earning well into 6 figures. I sit down with my accountant and decide to purchase a million dollar life insurance policy with the family trust as the beneficiary. He informs me that I'm not getting any younger and that I may wish to add some fixed income vehicles to my investment strategy. I acquiesce.

My portfolio is now going to grow at an average rate of approximately 8% but to help it along, I will reinstate the.