4 Ways Wealth Planning Helps You Succeed

By - Eng Khoon
07.10.22 02:30 AM

For most of us, we know that saving money is important. However, when it comes to actually doing it, we tend to fall into two camps; the non-planners and the planners. 

 

Non-planners typically save when they can, perhaps putting a small amount into a workplace retirement plan, hoping that everything will work out in the long run. Planners generally know what they're saving for, how much they need to put away, and how long it will take them to reach their goals.

 

Most of us tend to fall into the first category. But, being able to establish clarity around your finances is arguably one of the most critical things you can do for your overall financial success. Without understanding what is needed, it can be extremely difficult to achieve financial security. 

It is important to understand your financial needs and then to create a financial plan to meet them. Once you have a good understanding of what you need to have a healthy financial life, you can then create goals as a way to help you improve your financial situation. 

 

Still, with the many things happening in life, planning for anything more than a few days in advance can seem like a headache. So there comes the question: does wealth planning really help?

 

Well, we’re here to tell you it does. Here are 4 ways that wealth planning can help you succeed.

 

1. Wealth planning helps you set and reach your goals

Having a wealth plan in place helps individuals create and set goals to work towards. Goals are what give people direction and purpose in their lives. When individuals have clear goals in mind, it gives them something to focus on, which leads to the motivations to succeed. 

 

Wealth goals are important for people to have when it comes to having a stable and enjoyable life. Personal finances are an intimate part of every person’s life because money is often a medium to help people achieve their most cherished life goals. It’s particularly important to balance short-term, medium-term, and long-term goals with your finances. 

 

Having a wealth plan also gives you a measurable goal to work toward. Because you can track your progress, you can reduce doubt or uncertainty about your decisions and make adjustments to help overcome obstacles that could derail you.

 

2. Wealth plans are a great source of motivation and commitment

 

People are not often motivated when they do not have clear goals and do not know what is expected of them. Having a wealth plan reduces uncertainty around finances by providing clarity and indicating what you are expected to accomplish. You are more likely to work toward a goal that you know and understand. 

 

When you have a clear commitment, the ambiguity is no longer there to cloud your judgement. This allows for quicker action which increases follow-through, making it easier to accomplish your financial goals. 

 

Remember, wealth planning isn't just about investing; it's about what money can do for your confidence, security, and quality of life; such as the protection that life insurance offers or the peace of mind that an emergency fund can provide. 

 

3. A wealth plan can help you improve your financial outcomes

Your wealth plan allows you to begin with the end in mind. This gives people the proper perspective to balance their current goals and needs vs future goals and needs. A plan helps people to give attention to the future as well as today.

 

With a wealth plan, you will have a good idea of what your goals are, how much time you have to reach them, and how comfortable you are with risk. Once you have a comprehensive view, you can figure out how to reach each individual goal. Those with plans are more likely to be prepared for financial emergencies and retirement.

 

It will most likely involve both short term savings (for use in emergencies) as well as investment, which is setting aside money you'll need in the long term and that, ideally, can grow. And with your wealth plan as a roadmap, you'll be better able to make thoughtful investing decisions—instead of heading out without a sense of direction and just hoping for the best.

 

4. Wealth plans can direct actions toward desired outcomes

Taking action with financial decisions can be hard for a multitude of reasons. There is a lot of stress and shame around money which makes people want to avoid talking or thinking about it. Personal finances often incorporate terms that many individuals are not familiar with. This creates an even larger problem when you add that to the fact that financial decisions are often big decisions that can have lasting consequences, negatively or positively affecting you for the long term. 

 

A wealth plan will help you identify clear actions to take in order to put yourself in the best financial position. In fact, wealth planning can have a profound impact on helping people improve their saving and budgeting habits. A solid wealth plan helps you prioritise your goals and, as mentioned earlier, provides a way to gauge success.

 

When a trusted expert spells out what things need to be done, it is much easier to take action with confidence. Remember, planning, even in small steps, doesn't take large sums of money to start.

 

Conclusion

Planning your wealth may seem to be tedious at times, but often brings about success. A wealth plan is the best foundation on which to build, understand and achieve your goals. As the saying goes, you have to know better, in order to do better. Having a written wealth plan can increase confidence and result in more constructive financial behaviour, and helps individuals to know better so that they can start to do better. 

 

We hope you enjoyed the article. 

 

At SK i-Wealth, we offer a full financial service solution for individuals and companies, including wealth planning services. Our firm’s comprehensive wealth platform and experience supports a team of Financial Integrators with the resources they need to deliver integrated financial solutions according to your needs.