By Claudia Mollerup-Madsen

I have had the honor of managing clients’ wealth management for two decades. Many of my clients are business owners, have family offices, or are currently enjoying their retirement years. Having guided my clients over the years, I have learned many practical approaches to wealth management. Here are some guidelines to follow for accumulating wealth.

Set goals

At Morgan Stanley, we frequently use the term “goals-based wealth management.” As you might expect, setting goals is critical for determining your life’s financial plans. Think about what you would like to accomplish. For example, are you interested in starting your own business? Do you think about succession plans for a company you manage or own? Are you interested in purchasing a new vacation home? Have you thought about the age you would like to retire and if your financial goals are on track to meet that date? All of these answers will provide the right information for you to set essential goals.

Be proactive

Be proactive in meeting your goals. Too many people are unsure of what financial decisions and goals to set, so they do nothing. Get educated on money and investment opportunities. Be proactive in setting your goals and finding the right vehicles for your money to grow, whether it be stocks, bonds, mutual funds, investing back in your business, real estate, college savings or other means. By setting proactive goals now, you can meet your financial objectives for the future.

Timing is key

If you are early in your career, now may be the time to take greater risks regarding your investment plans.  The higher the risk, the greater the opportunity for profit if the company performs well.  Additionally, if an investment opportunity does not work out, you have more time on your side to make up that difference.  However, if you are further along in your career, near retirement, or in retirement, taking risks isn’t always advised. Talk to your financial advisor to see what is right for your situation.

To maximize your investments, look for opportunities to invest with compound interest. The earlier in your career the better the results. Compound interest is when your earnings also generate earnings.  Sometimes it is said to be interest on interest.  The longer you allow your investment to grow, the more quickly it will grow.  There are many opportunities out there for compound interest including some saving accounts, money market accounts, certificates of deposit (CDs), mutual funds and other investments.

Lower your expenses

It’s no surprise that if you spend less money, you can save more money. First, ensure you have a relevant, up-to-date budget based on your current income and expenses. Then, take a look at where your money is going. Do you really need a new car straight from the dealer, a two-week vacation around the world, or the latest smartphone? Most likely you can make cuts in various areas and apply that money to savings, investments, or your emergency fund. The more you save, the greater the wealth you can accumulate.

Build good habits

To amass wealth, you need to have good saving habits. Without continuing to save and watching your expenses, your money will dwindle before you know it. We have all heard of the musician or lottery winner who blew through their earnings all too quickly. Build your good habits of budgeting and saving now to reap the benefits of your hard work later.

Like most situations in life, the harder your work, the greater the payoff. Building wealth is no different.  By working diligently through various life stages to meet your financial goals, you may be able to accumulate wealth and bring yourself greater financial freedom.

Claudia Mollerup-Madsen is Vice President and Financial Advisor with the Wealth Management Division of Morgan Stanley in Houston.

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