The road to perfection is always under construction.
Our financial journey is long – considering the number of years we need to provide for ourselves, our family and our loved ones. Our timeline is dynamic – considering the changes that will take place at different stages of our lives, the rapidly evolving economic environment around us and the changing structures of corporate organizations in the midst of profit pressures and shareholders’ expectations. Our timeline is uncertain as an old adage goes:
“There is no greater certainty than the certainty of death. There is no greater uncertainty than the moment and timing of death.”
As such, we have to manage our timeline well and ensure that our financial roadmap is able to absorb the impact of the 3 shocks:
-Time Line Shocks
-Market Shocks
-Self-Funding Shocks

Lack of attention or an oversight in managing your timeline risks may prove disastrous for your entire financial plan. To create a winning financial road map, you need to know and understand the 4 Wealth Models:
-Wealth Protection Model
-Wealth Accumulation Model
-Wealth Management Model
-Wealth Distribution Model

Wealth Protection Model

The Wealth Protection Model is designed and structured to provide you with various elements to managing your risk exposures along your timeline, in the event of :
-Death
-Disability
-Dreaded Disease
-Displacement or Retrenchment
-Divorce
-Debt

As the illustration has been provided for your information and knowledge only, it is best that you work this process through with a qualified Financial Coach Mentor.

The Wealth Accumulation Model is specially designed and structured to help you accumulate wealth in the most effective and efficient manner. Your hard-earned money should be prudently managed. Your financial goals and objectives are spread across different time horizons: short-term, medium-term and long-term. As such, your wealth accumulation plan should also be strategised in a manner that will provide you with the necessary funding to fulfil the various financial objectives at the different stages of your life.

“Dreams shall be but mere dreams, if we are unable to fulfil them.”

– ASHOK

To realise your lifetime financial goals and objectives and to achieve lifetime success, you will need to embark on the journey with a “C.A.R”:
C- Challenge
You need to face each of your financial goals and objectives with a sense of challenge. Yes, not fear or intimidation, but a spirit of challenge. Face your future with a sense of challenge and a sense of boldness to overcome all your challenges.

A- Action
All planning and no action will only result in you building “castles in the air” – day-dreaming, no actualization of your plans, no achievement of your goals and aspirations. Take responsibility and transform your dreams into plans, and plans into actions. Turn the future from a dream into a reality.

R- Results
As with any cause, there will be an effect. As with any action, there will be a result. The greatest benefit of taking action is not solely in getting the results that you desire but also in the lessons learnt through the actions that did not give you the desired outcome. Life by itself is a journey of learning and growing. Do not deprive yourself of the great opportunity to grow stronger and wiser with each decision that you make and with each action that you take. Embark on a journey of great excitement and fantastic discovery – of yourself and your future.

Let us take the challenge to establish your Wealth Accumulation Model. A ‘challenge’ because it truly tests your courage to dream big. The size of your dreams will determine the size of your actions. The size of your actions will determine the size of your results.

Remember:
“A journey of a thousand miles starts with the first step … in the right direction.”

If you do not have the courage to take the challenge to dream big dreams for yourself and for your future, you are short-changing yourself and your loved-ones.
Let us take up the challenge to dream big and establish a Wealth Accumulation Model that befits your worthy future- because you are worth it!
Next, take action. No matter how small your steps might be at first, just do it! Each baby step that you take will give you a sense of confidence, belief and assurance. Each baby step that you take will bring you a step closer to realising your dreams and aspirations. Each baby step that you take will lead you to grow that step into giant steps ahead. As long as you continue your journey of learning and growing, each step that you take will bring you a step closer to your destiny – a destiny set in accordance to the size of your dreams.

Remember:

“A journey of a thousand miles starts with the first step, in the right direction.”

Following through your acceptance of the Challenge and your follow-up Action will give you the Result. It is a process of sowing and reaping. As you have continued in good faith to keep the journey going, to continue engaging in the process of learning and growing, to continue sowing the seeds of diligence and hard work; in due season, you shall surely reap a great harvest. This is the principle of “Sowing and Reaping”. The results are merely the by-products of what you have sown and diligently worked on.

The entire process of “Challenge, Action and Result” can best be achieved with the help of a Strategic Financial Coach and Mentor. He will make your learning process easier and a great deal more fun. You need not have to worry about all the blind-spots or pitfalls that you may encounter. You need not have to pay a heavy price of learning through your own mistakes. Be wise and prudent. Business and investment are team sports. Learn to play the game with the best talents you can find. You must play the game to win- because your future is worth it!

One other point on your Wealth Accumulation Model – it must have an element of continuity. Your Wealth Accumulation Model must not be disrupted or destroyed because of certain events that happen along your timeline. It must have insulation against all the various risk exposures that may jeopardise the success of your wealth accumulation plan.

As the illustration is provided for your information and knowledge only, it is best that you work this process through with a qualified Financial Coach or Mentor.

Wealth Management Model

The Wealth Management Model is designed and structured to optimise your IGA Portfolio. Its main objectives are to ensure that you are able to
-Optimise the returns of your IGA Portfolio to achieve your financial objectives
-Construct an IGA Portfolio that can withstand shocks and still give you a decent rate of return on your capital
-Fund the various financial goals and objectives at the different checkpoints along your timeline
-Manage your IGA Portfolio systematically and objectively.

If you ignore or neglect this important part of the financial management model, all that you have accumulated may be wiped out in a single independent crisis or event. Wealth accumulation without wealth management is malpractice. It is only a matter of time that you will come face to face with financial calamity. Remember, there will be economic cycles and market cycles as well as there are risk exposures in many different dimensions. It may just take a single event to bring you to your knees.

Having good knowledge and understanding of the Wealth Management Model will enable you to succeed in managing your financial capital and resources. Poor knowledge often leads to poor understanding, which will eventually result in poor management of your capital and resources.

What then do you need to know and understand in order to be able to manage your IGA Portfolio prudently?

The key investment information that you will need to know and understand are as follow:
-Liquidity
-Inflation
-Valuations
-Economic Data

In addition to the pertinent information above, you will also need to know and understand the following types of investment portfolios:
-Tactical Portfolios
-Growth Portfolios
-Balanced Portfolios
-Income Portfolios

Having a good understanding about how these different portfolios can each play a crucial and balanced role in your overall wealth management portfolio will enable you to create the winning strategy and prudent financial road map to accomplish your lifetime financial goals and objectives.

In constructing your Wealth Management Model, it is not just about optimising your investment returns alone. In addition, you may also need to consider how you can employ the various Risk Reduction Strategies to provide greater safety to your IGA Portfolio

You may apply these 5 principles of Risk Reduction Strategies in managing your IGA Portfolio:

-Asset Allocation
-Diversification
-Consistency vs. Volatility
-Capital Preservation
-Staying invested despite market shocks

As the illustration is provided for your information and knowledge only, it is best that you work this process through with a qualified Financial Coach or Mentor

Wealth Distribution Model

The Wealth Distribution Model is designed and structured to provide you with an orderly and cost-effective method of distributing your accumulated wealth to the next generation. It deals with the issues of succession, distribution and estate liquidity and estate tax planning.

Over the decades and centuries, many once-wealthy and closely-knitted families have fallen victim to the vicious trap of unplanned wealth distribution by the patriarch. There is a saying that goes:

“Unplanned giving often results in unplanned fighting within families.”
-Ashok

Losing a loved one is already a painful event to cope with. But having to deal with family disputes over the distribution of the estate can prove even nastier- especially for the widow or widower. It is certainly heartbreaking to see your own children fighting amongst each other, or worst still, fighting with you for a greater share of the estate assets. More often than not, there will not emerge any winner in such situations – both in terms of financial costs as well as in the broken and strained relationships.

All these potential problems can be prevented if you pay a little more attention to this important- but often neglected- part of wealth planning.

Do not procrastinate until it is too late to do anything. Let us take action and establish your Wealth Distribution Model. It may well prove to be the wisest thing you have ever done – you and your spouse are able to have better sleep and your children will feel more secured and assured knowing that you have taken steps to make all the necessary arrangements, with intentions clearly spelt out and documented.

In adopting a proactive approach in your Wealth Distribution Planning, you will be able to achieve 2 important goals in estate planning:
-Reduction in the cost of estate administration
-Preservation of the integrity of family relationships

A well-thought through Wealth Distribution Model also allows you to assess and ascertain the cash needs of your family upon your demise. In doing so, you can determine the estate liquidity needed to provide the cash flow to meet all your family obligations and responsibilities.
The Wealth Distribution Model is an important part of your overall financial planning. Let us take steps to guarantee a more assured and secure future for all your loved ones.

As the illustration is provided for your information and knowledge only, it is best that you work this process through with a qualified Financial Coach or Mentor.

Now that we have covered the 4 Wealth Models, let me introduce the 4 members that you should always have in your advisory team. (My next module)

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