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Delaena Kalevor says, surround yourself with people who share your values. In general, an individual with a large number of finance-educated friends and family members is less likely to make unwise transactions. This is because they would be enough affected by the behavior of people around them to prevent committing apparent errors that might prove costly in the future.
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Tips for Wealth Management from Finance Professional Delaena Kalevor Accumulating wealth has shown to be a foreign concept for a lot of people who are forced to live check-by-check. For those unfamiliar, this means that they have to allocate all of their expenses perfectly so that they can avoid succumbing to debt in the long-run. The problem, however, is that living like this makes it very hard to save up enough funds to make large purchases or improve quality of life. Hence why wealth accumulation and management are two of the most important concepts in the world of finance. So, what are some strategies for being successful, and how can they be applied?
Surround Yourself with Like-Minded People Generally speaking, the person that has a lot of finance-educated friends and family members will be less likely to make unintelligent purchases. This is because they will be influenced by the actions of those around them enough to avoid making obvious mistakes that could cost them in the future. Thus, one should surround themselves with a group of individuals that have clear-cut visions of where they want their financial future to be. Additionally, they should avoid connecting with those who may put them in the “competing” mode where they will constantly try to outdo one another with purchases. Have Enough Liquidity in Your Reserve
According to finance professional and former Vice President of Strategic Initiatives for Synchrony Financial, Delaena Kalevor, having enough liquidity in one’s reserve is a crucial concept in finance. Before explaining this concept, however, one should understand what exactly a reserve and liquidity mean. First, a reserve accounts for all of someone’s back-up funds that are meant to serve as a safety net in extreme situations. For instance, if one was to get fired, they would most likely need to tap into the reserve to be able to survive until they find new employment. Liquidity, on the other hand, is an accounting term that demonstrates how fast someone can convert their assets to cash. Thus, cash and other currency would be the most liquid assets that one could possess. Vehicles, homes, and other capital assets, however, would not be very liquid as one may need a prolonged period of time to sell them for cash. So, the reason why someone’s reserve should be liquid is quite obvious and boils down to the fact that they will not have time to make any monetary conversions. So, having access to liquid capital that can be spent immediately is extremely important. Figure Out Your Long-Term Plans
One of the most common financial mistakes that people make tends to revolve around their contingency plans. More specifically, plans that relate to their funds once they pass away. Enter wills! Ensuring that one has a will in place has a few important benefits to their financial future. First, it will ensure that all of their belongings go to the exact person or group of people of their choosing. Without a will, the state will assign someone’s asset to the next in line of succession, which could be family members that the person is not close with. Also, a will ensures that the funds will not be forfeited to the government if there is no person related to the deceased. Do Not Mix Personal and Business According to Delaena Kalevor, another common mistake that entrepreneurs make is combining their business-use and personal-use assets. This mostly happens when someone is self-employed and has to allocate their expenses between their company and personal accounts. Well, ensuring that there is a clear separation between the two will make one much more successful in the long run as they will have a better overview of what is going on. Additionally, dealing with taxes and other regulatory requirements is much easier if someone’s budgeting and tracking are handled with the utmost care. Keep Track of Your Interest Rates
A lot of people who purchase assets via financing expose themselves to interest expenses. Over time, however, their credit history may improve and they could become eligible for more competitive interest rates. So, looking for re- financing options and more competitive loans could be an easy way to save money every month and avoid paying large lenders high interest costs. Do Not Buy Easily Depreciable Assets in Bulk Ultimately, the key to wealth management is to manage capital purchases. To that end, it is crucial that one does not spend a large portion of their income on easily depreciable assets. For instance, purchasing a brand-new vehicle is often a mistake as one year of possession will decline its value by over a third in most cases. Instead, finding ways to invest excess capital and purchasing already depreciated assets might be a better way to be profitable.
