What Many High-Net-Worth Portfolios Are Missing

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When it comes to shoring up our financial health, two basic principles are our guiding light—live within your means and always be saving for the future. It’s something that applies to all of us; not just folks living paycheck to paycheck. I’d argue that it’s actually just as important for high-net-worth individuals and families.

Amassing assets doesn’t make you immune to financial pitfalls. And if your spending plan isn’t in line with your values, you’re essentially managing your money without a compass.

Over the years, I’ve worked with multimillionaires who were draining their nest eggs at record speed. Why? They were spending blindly, without goals and objectives. Often times, their emotions got the best of them, and they lost sight of the bigger picture. The remedy is uncovering these shortfalls, whatever they may be, then taking actionable steps to get back on the right track.

The great news is that it’s possible to do this without majorly disrupting your life.

Do You Need to Dramatically Downsize Your Lifestyle?

As a longtime certified financial planner and wealth advisor, my motto is that there’s never a bad time to reevaluate your financial plan. It’s always wise to revisit things when you’re approaching one of life’s big milestones. This includes everything from divorce to retirement to preparing to sell or invest in a business.

Each of these life events has the power to shake up your finances…and your emotional well-being, too! The idea is to get ahead of them and safeguard your wealth against any potential ups and downs you may run into along the way.

Can you expect either a short- or long-term dip in your income? Our goal is to help you weather this time while protecting your savings. Every client’s situation and needs are different, but the right financial advisor can help identify areas of your spending plan that can be tweaked and adjusted to reflect your new normal. That doesn’t have to mean drastically downsizing your lifestyle, but rather finding creative ways to make reasonable trade-offs that feel right to you.

You Can Continue Being Generous

Keeping up sound financial habits is a lifelong journey, during every phase of life. One fear I hear a lot of has to do with having to scale back on generosity.

Example: You’ve been paying for your grandchildren’s private school tuition for years, and it’s something that makes you feel good. You enjoy being able to share your wealth with your family. Now you’re approaching retirement and your spouse has encountered some unexpected medical bills due to a chronic illness. It isn’t uncommon for folks to want to keep up their previous level of spending, especially when it’s tied to such a deep-seated value—taking care of family.

What I know for sure is that financial choices don’t always have to be all or nothing. It’s possible to identify different combinations of ways to adjust our spending in order to keep our most important values front and center. In the scenario above, it may look like meeting your grandchildren’s tuition halfway, or scaling back on other spending areas to increase your cash flow to continue covering the whole thing. Also, I witness the feelings of guilt and shame over not being “good enough” or feeling “less than.” Remember: it’s not always about “all or none.”

What we’re getting at here is that our financial lives are often more flexible than we think. When our spending supports what matters to us most, happiness usually follows.

It’s Never Too Late to Course Correct

Adjusting your financial plan ahead of life’s big changes is always ideal, but life doesn’t always work this way. You don’t need me to tell you that sometimes life throws you a curve ball that changes everything, and we simply can’t prepare for every possible scenario. No matter what the circumstance, time is far and away your best defense—the sooner you can begin reevaluating your financial plan, the better.

This involves taking stock of your current financial situation, reassessing your objectives and goals, then adjusting your spending plan to reflect these values and desires. At JJ Burns & Company, part of our job is uncovering gaps and revealing weaknesses, then providing options to remedy the problem and bolster your long-term financial health.

It’s never too late to get back in the driver’s seat. Having an expert team behind you sure makes things a lot easier.

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