Effective personal financial planning for High net worth individuals, managers and those leading organisations is complex and difficult to reduce to a single, easy to understand formula. Financial wellness has nothing to do with income or education level. Financial wellness is a practiced and learned skill which plays a vital role in our overall wellness, a degree or management role is not a guarantee of success in financial wellness.
It is interesting that most high-flying executives think financial wellness information and knowledge is needed by either younger or lower level employees. The reality is that most of us were not given formal money management training, so it’s been a ‘trial and error’ situation for most of us. One thing we must realise is that we are all at different points in our money journey, and it’s important to get support to allow you to excel.
Forget the Ego! Yes, you are at the top of your career ladder, but even the best athletes and sportspeople enlist the services of a coach. Why is it so difficult for us to do the same, especially when it is regarding our personal finances? We need professional support to develop an effective money management strategy.
Financial goals don’t achieve themselves and financial challenges don’t just disappear, we need to do something about them. For many of us, money is a mystery. It’s not the numbers that are complicated, but it’s the mental pressure that bogs us down; the psychology, the emotions, the discipline and peer pressure.
Financial wellness is like a continuum which commences with basic financial knowledge and culminates in Financial Abundance. The first level, Basic Financial Knowledge is where you start to develop an awareness of your financial situation, you start having a basic understanding of your money habits, attitudes and money scripts. We have developed a six step pyramid, and at the top is Financial Abundance. Financial Abundance is when you have gone beyond financial freedom and have now put in place tools to automate your investments and you have a diverse portfolio.
We are all at different stages of this continuum, and we sometime get stuck at certain stages, needing a little support, or encouragement to get to the next level. Other elements that we need to consider are retirement and estate planning. We will retire at some point in our lives, and need to make a decision and plan for our retirement. And no, children are not a retirement plan! Some wise person said, if you don’t make a plan, you plan to fail. This applies to everything in life. A life plan, a plan for your family, a plan for your career, a spiritual plan, a plan for how you will spend your leisure time….. All these are plans.
Interestingly, all these plans require some level of financing.
Earning a big salary does not make you wealthy. Neither does a higher salary make you an automatic expert in investments. Even if you’re in the highest tax bracket, you could find it difficult to pay your bills on a monthly basis, or find it difficult to navigate the muddy waters of investment. While earning a good salary is a good starting point on the road to building wealth, if you spend everything you make, you’ll definitely face financial challenges.
The basics of personal finances apply across the board no matter how much money you make. The foundation and basics state that we should maximise income and control expenditure. Consider financial wellness strategies, one on one personal financial coaching, or management level financial wellness, find a program to meet your needs.