Am I Wealthy Enough for Wealth Management?

by Krantcents · 18 comments

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Am I wealthy enough for wealth management?  It is the question of the day!  When do I have enough assets that I could benefit from an expert?  I know you probably don’t feel as though this is even on your horizon, but someday you might.  Why wait?  You can use some great free tools to manage your money.  It will keep you better organized and on track to achieving your personal financial goals too.

Rich, wealthy people were always someone else to me.  It was the people I went to school with or my neighbors or people I knew.  I didn’t know until much later that my parents were wealthy.  They had all the required pieces, but lived very frugally.  They had thriving businesses, a second home and no debt.  I did not know about the lack of debt until much later.  I was no different than my peers, but I never thought about it.  My goal was always to become of one of them!

I was always fascinated with money and made a career out of it.  My skills and experience gave me tools that helped me invest and track my investments fairly well. The internet changed all that!  There are a lot of free apps and tools to track your investments second by second.  I know that you should  not watch your investments that closely, but you can.  I monitored my portfolio in MSN Money, Google Finance and Yahoo Finance.  They each have pros and cons and settled with Yahoo Finance to track my portfolio.

It did not do much; just track my investment which is all I needed it to do.  I started to look into other online tools and came across quite a few.  Do I need them?  Do I need everything tied together?  My approach to my investments may be different than most because of my skills and experience.  A long time ago, I saw my net worth grow thanks to investing in assets and used it as a measurement of my wealth.  Now I use it as a measurement of my progress to bigger goals. The internet provides many tools that are easy to use and will make me more effective.

Years ago, I used a spreadsheet for tracking my investments.  It was a good way to summarize a number of investment account at three (3) different mutual fund families.  Then I started to use Yahoo Finance to track my portfolio, although I still maintained my spreadsheet.  I still had to update my online portfolio for every transaction and quarter.  Now I use Personal Capital to track my portfolio because all my accounts are linked.  It saves me time and makes the information current all the time.

One of the problems for many people as they accumulate wealth is available advice.  You can find financial advisors who will prepare a financial plan for you.  Your financial advisor may be your CPA, attorney or banker or financial advisor/planner.  There are generally two (2) kinds of advisors, fee only or fee based financial advisors.  How financial advisors are compensated may mean what products they may sell to you.  Fee only advisors charge an hourly fee for their work and fee based is commission on investment transactions.

Fee only financial advisors are considered more objective because they not compensated for the investments they may suggest.  Fee based advisors or advisors who generate commissions are another choice, however they make money when they generate an investment transaction.  Which one is right for you?  This is a much longer discussion.  I think it is worthwhile to do your homework and ask questions.  What do you need and how you will use the advisor?

Online services have increased over time.  Access to information, particularly financial information is important for you to reach your financial goals.  You can do it yourself, get financial advice or a combination of both.  Typically, wealth management was for someone who had accumulated a great deal of wealth and it was part of the bank trust department or insurance companies.  Generally, wealthy individuals, families or businesses that have a net worth I excess of $5 million dollars net worth.  Personal Capital is offering some of these services to people on the way to wealth.  They offer financial solutions to 35-65 year olds and have $100,000 and $2 million in assets.

Personal Capital helps you organize all your financial information in a nice format online.  That service is completely free!  They have financial advisors who will help you evaluate your financial goals.  They will help you develop a personal strategy based on your specific needs, goals and assets.  In exchange for the advice, it will cost a management fee of less than 1 percent.  It is similar to typical wealth management fees, but less expensive than many higher end advisors.

Final Thoughts

I only recently started to use Personal Capital as a way to track my investments and financial information.  It is much easier, more accurate and provides much more information than I had before.  It helps me see immediately all my investments and their performance.   I can look at my asset allocation and all my financial information in one place anywhere which is very convenient.  I get an investment checkup (free) regarding fees (mutual funds and 401k) , advice through emails and a universal checkbook.  It offers so much more than other online services and it makes it easier to manage my financial information.  Is Personal Capital for you or just the wealthy?

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Skint in the City July 2, 2013 at 2:36 am

It’s a question I’ve often asked myself too. I used to think wealth management didn’t apply to me because my savings are so small, but now I see it as an important tool in growing them.
And I think it helps change your mindset too – even if the amounts we’re managing are small at first it shifts the mindset from being only about frugality and saving to expansion.

Krantcents July 2, 2013 at 7:35 am

Our definition of wealth seems to often refer to someone else. Over time, your retirement savings can grow into something meaningful and a little guidance can help you get to your goal.

Pauline July 2, 2013 at 8:38 am

There is a wealth of knowledge online, if you are willing to do the work. Even for beginners you can have automated accounts, invest in index and beat most fund managers.
I’d rather take care of my investments than have a manager tell me that he is too busy for me because I don’t have 20 million with him.

Krantcents July 2, 2013 at 8:50 am

It is sad that it takes $20 million to get some’s attention! Investing is mostly common sense and you just need to follow a few sensible rules such as having long term goals, low expenses, asset allocation and diversification.

John S @ Frugal Rules July 2, 2013 at 11:52 am

I think for many, assuming they take advantage of the info available online, should be able to manage it themselves. That said, I do think there is a time and place for having an advisor – as long as they’re fee only and will help balance you out. My concern would be to watch the fees and make sure they’re concerned about you & not just out to make a buck.

Krantcents July 2, 2013 at 12:21 pm

I think you should always be cynical with advice! Although Personal capital will do a free evaluation or manage your investments for a management fee.

AverageJoe July 2, 2013 at 1:11 pm

I think tracking your wealth is very important. I’d have potential clients who said they didn’t manage wealth because they were still building….huh? Your current wealth is 100% of what you have, and regardless of the number of decimal points, it’s enough to be taken seriously.

Krantcents July 2, 2013 at 3:12 pm

I could never understand how people can trivialize money. Your investments are important however small if you want them to become larger someday.

Pension Retirement July 2, 2013 at 8:13 pm

I think it depends a lot on what you think wealth management is and if you would rather have someone else do that versus doing it yourself. It looks like the majority of what you’re talking about is monitoring investments. I’d be looking for someone with a more strategic outlook and I’d be looking for long-term asset allocation decisions based primarily on technical factors. However, I like to do it myself so I keep on doing so, even if it does take a bit of time. Does PC do anything other than track investments?

Krantcents July 2, 2013 at 8:17 pm

They do manage your investments for a fee.

Lindsey @ Cents & Sensibility July 2, 2013 at 9:08 pm

I’ll probably be ready for something like Personal Capital in about five years. All my debt will be student loans and consumer debt will be paid off which will completely re-position our debt/asset ratio. Thanks for the great tips!

Krantcents July 3, 2013 at 8:10 am

I would contact them now to position myself for the future.

Anton Ivanov July 6, 2013 at 12:21 pm

Free online money management applications like Personal Capital or Mint are great ways to manage money online and on the go (with their mobile apps). I’ve always been skeptical on hiring a financial advisor, since it’s absolutely possible to manage your own money, no matter how wealthy you are.

Krantcents July 6, 2013 at 1:03 pm

I agree! I have managed my investments for more than 40 years, b ut sometimes you want choices evaluated or just another viewpoint.

Suzanne July 10, 2013 at 3:16 pm

As we accumulate wealth, we may need advice on what to do or how to plan for the future. I have found that a great place to find an advisor charging for hourly advice is the Garrett Planning Network.

Krantcents July 10, 2013 at 4:27 pm

That is great! You may want to use Personal Capital as another by using there free evaluation.

Winnie Y. Coffey July 19, 2013 at 1:25 pm

For me, personally, I’m not sure I would use the wealth management service, though there is a valid argument why someone would want to use their service instead of doing it themselves. For me, it’s not because I don’t trust their service, it’s because of the lack of flexibility and I enjoy researching and managing our finances. If I did use their service, it would be for a small subset of our portfolio. I could see for others Personal Capital is a godsend because they have no idea how to properly allocate their investments for retirement.

Krantcents July 19, 2013 at 4:19 pm

Even if you do not use their wealth management service, they offer a very helpful website.

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