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“Wealth management” is a term that is often thrown around, but if you’re new to investing, it can be a difficult concept to grasp.

Although there are lots of financial planning tips around, unless you can develop a wealth management mindset and know-how to track your wealth management, you’ll struggle to see the desired returns.

So, here we’ll explore this topic in more detail and discover the ways that you can easily track your wealth management.

The Wealth Management Basics

In simple terms, wealth management is the principle of enhancing or solving your financial situation. The term was coined by finance professionals as the ability to choose the best types of investments rather than just investment advice. Wealth management should consider all aspects of a person’s financial life, so there is a holistic approach where all the services needed to manage money and plan for the future are covered.

Many wealth management strategies are based on specialisation in particular areas of focus. So whether you decide to consult a professional or do it yourself, you may have some aspects of your wealth management outsourced to others to develop the most beneficial strategy.

There are four main areas of comprehensive wealth management. These are:

Financial planning
Investment management
Life planning
Wealth management

Each of these areas requires different planning strategies to ensure that you are completely covered.

The DIY Approach

Although JP Morgan statistics show that individual investors make an average of 2.6% per year, far lower than the 7-10% typically enjoyed with the stock market, it is still possible to take a DIY approach to wealth management. Of course, you’ll need to understand the best types of investments for your specific risk profile.

DIY wealth management requires some basic abilities and resources, including having the proper emotional constitution. This means that while you can go with your gut if you feel strongly, you don’t get caught up in an emotional whirlwind of investing. You also need to feel comfortable with numbers, so you can analyze financial reports without falling for any deceptively positive spin.

You will also need to develop the skills to complete present or future value calculations, but there are tools available to assist you with this. It would help if you also made an honest assessment of your unique limitations. This will enable you to start in areas where you feel confident and see help for all other areas.

For example, while you may feel confident about structuring and managing your individual stocks to create a diversified portfolio, if you’re not sure you could accomplish this with bonds, you could use an outside manager to handle these investments.

As your abilities grow, you’ll start to feel more confident that you can bring some or even all of these outsourced areas back under your direct control.

Tracking Your Wealth Management

One of the most crucial areas of DIY wealth management is a way to reliably and accurately track the performance of your financial products and investments. You need to honestly assess how your investment efforts are matching professional portfolio performances to determine if you need to seek help or can continue going it alone.

Fortunately, there are some great tools and apps that can help you to track your wealth management. These include:

Yodlee.com: This platform offers a variety of online money management services, allowing you to track all of your investments and accounts. You can not only track investment values but also create budgets, track spending, and even pay bills through this site.
MoneyStrands.com: This is a money management tool that can gather all your financial information automatically. This allows you to see all of your investments and accounts in one place, and you can even sign up for personalized financial advice.
Money-rates.com: This website allows you to compare interest rates on credit cards, CDs, savings accounts, and money markets quickly. This allows you to maximize the interest you earn on your investments and savings while minimizing the interest charged on any debt. The site also offers tools and information to help you to make informed choices.

Getting Started

The first step to getting started with your wealth management strategy is to get an understanding of your financial situation. You can only start to address investments and financial planning once you have an accurate and reliable picture of your finances. Unfortunately, according to US Bank, only 41% of Americans follow a basic budget; one of the fundamentals of financial planning.

Fortunately, there are lots of tools that can help you to not only establish a budget but also keep track of your expenses and costs. These tools can also be used to streamline your expenses to create disposable income to start your investment journey. These include:

Mint.com: This is one of the most popular finance websites to track budgeting and cashflow. It can help you to analyze your financial situation and will even offer some suggestions on where you can save on your expenses. You can also use the site to research bank accounts or credit cards to get the best deal.
BudgetPulse.com: This website provides a basic budget system to monitor your savings and spendings. You can also track finances in multiple currencies, so it is ideal for those who frequently travel or have overseas investments.

So, Are You Ready to Start Your Wealth Management?

If you want to have a strong financial future, it is crucial to develop a wealth management mindset and take a more proactive approach to your finances.

Fortunately, there are professional experts and some great DIY tools to help you tackle all aspects of wealth management, from managing your budget to making investments, allowing you to establish a solid portfolio to meet your financial goals.

Author Bio:

Lorraine Halton enjoyed a successful career in the finance industry and now uses this expertise as a professional writer. Through her blog posts and articles, she helps people to improve their financial health. Whether you need to organize a budget, save money or plan your financial future, Lorraine can help.

Sole traders are more than just individuals; they’re business people who are self-employed and running their own business alone.

As a sole trader, it can be easy for your life to become entwined with that of your business, as it means that your finances become combined and you find it difficult to separate a business expense from an individual one.

This can make your life difficult, particularly when it comes to paying taxes, creating budgets and accurately assessing how much money you’ve spent on your business over a period of time.

To help, here are some practical ways you can divide your business and personal finances as a sole trader and make both facets of your life enjoyable.

Use An App

There are a variety of apps out there that are designed to allow you to track your business expenses, invoices and more, meaning that you can accurately log your business finances in one place and keep them separate from your personal expenditure. This will make accounting easier and allow you to track how much money your business is costing.

Be More Careful With Money

It sounds obvious, but when you become a sole trader you need to be more careful about your spending in general. Learn ways to save money, such as buying some items in bulk and avoiding using tempting, but hard to keep track of spending methods, such as contactless. This approach will help you to save money and keep your business and personal finances under control.

Keep Your Borrowing Separate

In the finance market, there are personal and business loans, but in some cases services like overdrafts and credit cards can make the lines between borrowing for business and personal use blurry. To avoid any confusion, take out dedicated personal and business loans instead of using short term financing options. This approach will save you money and time in the long term. Check out https://www.citrusloans.co.uk/ to find a selection of personal loan options to suit any personal need, so that you don’t end up using your work credit card or dipping into savings designated for your business.

Mark Every Transaction

If you have several transactions in your bank that you are unsure of, then you’ll be unable to accurately plan your spending and completely understand your business’ cash flow. As such, you need to make sure that you label every transaction accurately and are clear about where all of your money comes from.

Create Separate Budgets

Draw up a personal budget alongside your business one, and make sure that you stick to both. This will show you how much money you have to spend, and where you need to be spending it. In both your personal and business budgets, you need to make sure that you leave a little money aside for emergencies, and some to be put into a savings account to accumulate and help you prepare for any serious emergency expenses that you encounter.

Learn To Do Your Accounts Yourself

Doing your accounts might seem time consuming and boring, but it’s an important part of running a business. It will teach you to appreciate the value of money and understand the rate of tax you need to pay for every pound you earn. Whilst it might be tempting to outsource your accounts, doing them yourself will allow you to price your services accurately and learn a valuable skill that will stand you in good stead throughout your time in the business market.

A Business Bank Account Is The Ultimate Way To Separate Your Money

Unlike other forms of business, as a sole trader, you’re not legally obliged to have a business bank account, and as such in the beginning, when you first became a sole trader, you might not have thought it necessary to open one. After all, it was just more hassle and work for you at an already busy time. However, now that your business is up and running, with more transactions, it will be tough to keep your business and personal money separate without a business account. Business bank accounts also offer a wide range of additional benefits for your company, making it easier for you to conduct your business and provide your clients with the services they want.

Separate Your Savings Too

As well as your current account, budgets and borrowing, you should also separate your savings when you become a sole trader. Create a separate account for your business savings, so that you can reinvest your profits into your business and prepare for the future. Alongside business banking options, there is also a wide range of business savings accounts on offer so that you can separate your personal and business savings.

Being a sole trader can be a serious challenge, but by using these tips you can be organised, separate your finances and make your accounts easier.

What Is Wealth Management?