Manage

7 Steps of Personal Wealth Management

1. Gathering financial data
2. Establishing financial goals
3. Auditing and analyzing the portfolio
4. Recommending a financial plan
5. Implementing the plan
6. Monitoring and reporting on the plan

Where are you on the journey of building your financial pyramid?

1. Managing your money

When building your pyramid, the base is all about financial protection. This means taking care of your daily expenses, housing and transportation, with a focus on survival through stable cash flow and debt management (such as paying off credit card debt). Once you’ve built a secure foundation you can begin moving through all the other levels of the pyramid.

2. Protecting your money

The next step is to build upon your financial protection. Most Canadians live in this level of the pyramid. A 2019 IPSOS Reid study revealed that nearly half of Canadians only have about $500 left after paying bills and debts at the end of each month. You can create a financial safety net by putting any extra dollars into savings and an emergency fund, and buying insurance in case the unexpected happens.

3. Accumulating wealth

Once you’ve mastered day-to-day money management and safety and sustainability, you can shift your focus to accumulating and growing your wealth. You can work with a financial advisor to build your investment portfolio, save for retirement, minimize taxes and pay down debt such as mortgages. Overall, this level is all about planning for your future to accelerate your move to the next level of the pyramid.

4. Preserving wealth

This is where financial independence begins. You’re managing your daily expenses and regularly contributing to emergency funds and savings accounts such as your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Savings at this level relate to your children’s education, long-term care (should you need it) and maybe even that brand new car you’ve always wanted. Your investments and long-term savings accounts are growing, you’ve got a solid retirement plan in place and you’re confident that your wealth will be preserved for years to come.

5. Leaving a legacy

Once you have accumulated your wealth and are confident in your ability to preserve it for your future, you have reached the top of the pyramid! You can enjoy your financial freedom and consider estate planning, taking care of loved ones and leaving a philanthropic legacy.

One Size Fits One 

Create a Strategy That Works For YOU

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