MANAGE YOUR WEALTH AND ENJOY GOLDEN AGE PEACEFULLY
WOULDN’T IT BE GREAT IF EACH AND EVERY ONE OF US CAN WALK THE WORDS AND ENJOY THE GOLDEN AGE PEACEFULLY AS SAID BY THE WISE MEN? ALTHOUGH IT MAY SOUND EASY, THE IMPLEMENTATION CAN BE QUITE CHALLENGING.
In achieving our goals, whether financials or non-financials, it is essential to determine and prioritize them so that they can be achieved on timely manner. A wealth management service may actually help you in identifying and achieving those goals. Literally, wealth management can be seen as a process to manage and maximize the growth of your assets to help you achieving your goals. Wealth management helps you to prioritize those important goals and to ensure them being accomplished. However, the question is, how deep can a wealth management service go?
In general, a complete wealth management service has to have four main pillars which closely relates to one’s age and the goals that would like to be achieved. The pillars can be described by the acronym of PERM:
Protection is the first pillar which closely relates to managing wealth. People tend to overlook protection as they focus to earn as much money as possible to save for their future. However, they often forget to protect themselves and their families. By having a protection, you are shifting parts of economic burden away from your family. This also helps to ensure they will be able to enjoy the benefit of wealth management.
The next one is Education, which is an essential component for your loved ones. Preparing for their future tuition fees is a key to secure a brighter future for them. By managing your wealth wisely, you can be well prepared to face the rising cost of education.
Do you still remember that enjoying your golden age peacefully is your main goal? To achieve that, you will need to start planning your Retirement. Unfortunately, not many people have started to plan their retirement, let alone thinking of having one. Based on an analysis conducted by HSBC Global Research, on average, regular employees in Indonesia started to join the workforce at the age of 25, and entering their retirement when they are 55 years old.
A retiree who wished to rely on their pension fund, with no investment, will need to draw their life savings as their pension fund can only cover the cost of two years from his full retirement years. With average life expectancy of a retiree in Indonesia around 23-25 years, the retiree will need to finance the majority of their retirement period by themselves. The fact that it is worrying, have you planned your retirement well enough?
To help you in achieving the above 3 pillars, it is important to well Manage and Grow your wealth. The saying of “high risk, high return” has been well said, but not many of us have understood fully the meaning behind, as the market commonly perceived that a certain percentage of profit has to be generated when entering investment. Yet, the fact in the market is different.
Investors need to be aware that the financial market is affected by both domestic and global factors. Thus, prior to investing, it is important for you to understand fully the characteristics of the investment product.
Finally, a wealth management will need to take into account other factors like age, lifestyle, the amount of income and expenses, and the risk profile of each individual. Frankly, it is not easy for Indonesians to speak openly on their wealth to a stranger. However, being open will definitely help your wealth manager in managing your wealth together.
Nevertheless, it is undeniable that selection of investment product closely related with the individual’s risk profile. However, most of the time, investors tend to exaggerate their risk profile to become more aggressive, but cannot bear the volatility. This essentially gave traumatic experience to the investor.
Implementing and monitoring your investment plan is another challenging stage too. Regular monitoring is necessary to ensure your investment is growing well, so that your future goals can be achieved on timely manner.
It would be wise to review and rebalance your portfolio at least on quarterly basis. The rebalancing is required in response to changes in needs, major economic events and the condition within the capital market, so that the maximum return from your portfolio can be achieved.
