Wealth Management Insights: From Lifestyle to Investments and More

Wealth Management Insights: From Lifestyle to Investments and More

| June 24, 2020

There’s a lot of talk about the economy right now. Not only did the country see the largest peak of unemployment claims since the Great Depression, it also saw the complete self-imposed halt of various industries, people locked in their homes, and a lot of uncertainty. To add to that, the country’s cultural tensions have also risen thanks to recent events. All of this makes the markets quite shaky and people a little confused as to what’s next. Consumers usually get cautious during uncertain times of economic upheaval and many of America’s adults have admitted to purposefully cutting their spending on things that are not necessities. 

Prior to the pandemic, many Americans already found themselves  in debt but today, many more have tacked on charges on their credit card due to loss of and/or lack of income. At the same time, many consumers have seen their credit slashed and find themselves low on cash. So what happens when people have nowhere to turn for the necessary funds?

Many people might turn to their 401k, which can be an option for those with no other means. The actions taken today, however, can have economic ramifications for people if they are not careful. It’s important to consider all other options before taking steps that might effect your finances indefinitely. After all, the U.S economy is a consumer based economy and is very likely to lift itself out of the ashes. Luckily, by many accounts, the effects of the economy look like they begin to look up as businesses return and open their doors. Herrera Group helps people approach their investments in a sound and thoughtful manner, even when things seem a little uncertain.

Lifestyle — Helping Clients Navigate Their Present and Future Needs 

In 1943, Maslow’s Hierarchy of Needs was frequently used to assess lifestyle choices and figure out the hierarchy of life’s needs and wants. According to Maslow, the human needs can be thought about in ascending order of importance. These are from basic needs to thrilling and fulfilling experiences. According to this reason, we have peak experience on the top of the pyramid, then self actualization, psychological needs, then safety needs, and finally basic needs. Buying a home, for example, is an important need and want of many people and it acts as a want as well, as many people see it as a personal accomplishment. 

Smart financial planning involves taking the past, present, and future into consideration. 

Deciding on your mortgage: Structuring your mortgage might depend on your particular situation but deciding on whether you want a 15 year or 30 year mortgage is an important consideration. Other decisions when it comes to your home include finding the right size, proper mortgage structure, payments, location, and more. 

Smart Choices: When it comes to choices you make on your lifestyle, it might depend a lot on what it is you like to do and how you achieve some of the things in the hierarchy of wants and needs. Do you get most of your fulfillment from work, quality family time, or from traveling across the world? It’s important to make smart choices based on the kind of life you envision yourself leading for years to come. 

Balance: Living paycheck to paycheck is not a good idea for anybody. Frankly, it is not sustainable— it is too taxing on the nerves. Finding the right balance between work and leisure, while not sacrificing your finances is a way of financial planning and balance that pays off at the end. 

Investments — Finding the Right Balance for Your Investing Potential 

Investing is a great way to expand your wealth and secure your financial future. This, of course, requires some planning and smart choices. Here at the Herrera Group, we can help you find the right approach to investing for your specific situation. To begin with, we can start talking about the five smart investing principles that we think can help anybody steer the ship in the right direction. 

  • Estimate your time horizon. How much time are you looking at here for your investment? Is your retirement 20 years away or 30 years away? If you have a longer time horizon, you might get away with being a little more aggressive. If, on the other hand, retirement is a few years away, maybe staying a little more conservative. 
  • Know and understand your risk profile. How comfortable are you with big swings in the profile? Would you prefer to stay with something that is less volatile or can you handle the upswings? 
  • Diversify. Diversification refers to a portfolio that has different kinds of investments in order to minimize risk a little bit. If your investments are spread out on a wider spectrum, you minimize the risk of one thing getting hit all at once. 
  • Consider taxes and inflation. These are two things that can play a role in your investments as they grow and as they spend longer time in the market. Watching for the rising prices will make you more aware of important changes. 
  • Don’t procrastinate. Don’t think too much about it and get started. If you wait five years on this you have likely lost some potential investments. Take the first steps towards your investments today. 

Don’t Know Where to Start? Get With a Professional Wealth Manager Today 

Whether you are looking to diversify or begin your investment portfolio, we are here to help. We look at our clients’ circumstances and goals individually in order to find the best answer for you. Call the Herrera Group today and be on your way to sound financial planning and wealth management.