By Amy Smith
Being rich is not hard. It’s a matter of adopting the right attitude.
After all, the woman convinced by her mother that she’ll always be poor is unlikely to take steps to attain substantial wealth. And the couple who plays it safe to ensure a comfortable lifestyle for the kids won’t take perceived risks to change their financial situation.
But there are ways to get past our financial programming, to make a difference in our lives by paying attention to matters that many of us tend to ignore.
If you follow each one of these steps, your financial situation will improve. How much your circumstances improve will depend on varying factors, but this is a great beginning:
- Realize that it’s important to track what you spend. Recap last year’s expenses and create a budget for the current year. This isn’t a diet and you can adjust as you go along, so don’t avoid this step. Look at it as a way to make simple adjustments in your mind set to increase your wealth.
- Evaluate your net worth. After all, you don’t want to forget about money left in an account or a drawer, or a piece of jewelry hidden in the back of the closet. Forgotten assets can add up and should be maximized for value.
- Review your estate planning documents. Make sure to do this at least once every five years. If there’s a change in circumstances, such as a new child or grandchild, sale of a vacation home or an unexpected inheritance, you’ll want to do this right away.
- Prepare your income tax return data early. No one really likes compiling all the figures, but the sooner you get this information to your tax planner each year, the better.
- Rebalance your portfolio with target allocations. If one particular stock took off and made you a bundle, take some off the table. If you needed to dip into your emergency fund, rebalance to reflect this withdrawal.
- Meet with your financial advisor at least once a year to review steps one to five above. Just the process of talking things out with an objective advisor will help determine a course of action that will maximize your wealth.
- Dare to imagine your ideal financial picture. Envisioning a desirable scenario will help empower you to turn it into reality.
© Amy V. Smith Wealth Management, LLC, is an independent firm. Amy is a Certified Financial Planner (CFP) and Certified Investment Management Analyst (CIMA) and offers securities through Raymond James Financial Services, Inc., member FINRA/SIPC. Her office is located at 161 Fort Evans Road, NE, Ste 345, Leesburg, VA 20176. www.amysmithwealthmanagement.com. Please note: changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS we are not qualified to render advice on tax or legal matters. The opinions and recommendations here are those of the columnist.