By Kristin Hovencamp, CPWA®
Managing your finances consists of much more than investing your savings. Though investments receive the most attention and fanfare, they are only one part of the puzzle. Your financial life is ever evolving, and every rite of passage brings new challenges and expectations. How can you sleep confidently knowing you have the right pieces in place when making decisions that can alter your future? Start by using a discovery process.
The first step of the discovery process is to examine each piece of your financial life as a separate entity.
Top Priorities – List your priorities for the next 12 to 24 months and determine how much money is needed to accomplish these objectives.
Liquidity Needs – Establish your annual liquidity needs. Have you enough of a cash balance to cover your expenses? Are you comfortable with a 12-, 24- or 36-month cash reserve? Be sure to build in a cushion in case the unexpected happens.
Retirement Income – If you were to live to 100 years old, how much money would you need in retirement to continue living your lifestyle comfortably?
Risk Management – Risk tolerance is personal. Managing investment risk is an ongoing process reevaluated during both bull and bear markets.
Estate Matters – Review your estate plan with legal counsel every five years and confirm your wealth management team is updated.
Tax Planning – Your CPA completes your taxes. However, your financial team can capture tax-planning opportunities in advance.
Insurance – Do you have adequate life insurance? Have you purchased long-term care? Is your entire estate covered? As your age and wealth increase, so will your insurance needs.
Investment strategy – One piece does not fall all. Define the investment mix that meets your criteria.
The pieces will fall into place once you have completed the discovery process. With more birthdays comes wisdom, and with more preparation comes a good night’s sleep. Stay tuned to delve into the discovery process.
Kristin Hovencamp, CPWA® is an Investment Executive and Director of Business Development with HAZLETT WEALTH MANAGEMENT, LLC, which is independent of Raymond James and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. 675 Sun Valley Road, Suite J1 + J2 Ketchum, Idaho 83340 208.726.0605.