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Wealth Management: How to Grow your Money

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Wealth Management: How to Grow your Money

At the core of every investment is one essential principle – that of building enough wealth so that you end up with more money than you had originally started out with. A crucial element that can greatly condition our future and provide financial independence both before and during retirement, accumulating wealth is not just about having a few extra euros to fulfill your dreams, but it is about creating a solid foundation that will ensure your financial comfort throughout your life.

But building wealth does not happen overnight and in fact, it requires a good dose of patience, discipline and diligence. By setting healthy spending, saving and budgeting habits, the path to growing your money becomes much easier.

Read along to explore the ideal strategy that will help you set up a portfolio tailored to your financial goals and the steps you need to take to build your wealth.

 

Why building your wealth is important?

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Your financial security can impact every aspect of your life both personally and professionally and having sufficient wealth means that you can comfortably and reliably meet your monthly expenses to support your desired standard of living even if your source of income ends. Yet, building wealth is more than that. It is about building financial freedom and giving you true control over your life. It can help you put your family’s needs first, take professional risks and open doors to new possibilities, while it can ensure that you can maintain the same standard of living throughout your retirement. What’s more, financial security can help you leave a legacy for the next generation.

 

What are the different types of wealth?

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When we think about wealth, the first thing that springs to mind is cash. Whereas money is important, wealth is in essence a store of value that can be enjoyed in the future and as a result, it may include a number of things as outlined hereunder.

  • Capital – mainly referring to financial assets like funds held in deposit accounts or funds obtained via specific financial sources, capital is also associated with the capital assets of a company. The four major types of capital include debt, equity, trading and working capital, whereas capital assets may include cash, cash equivalents and marketable securities, as well as a variety of equipment and facilities such as production or storage facilities.
  • Commodities – these are basic goods like oil, natural gas and others that can be sold at market. Interchangeable with other goods of the same type, the quality of any given commodity may differ from commodity to commodity, however, it is consistent across producers. Precious commodities such as gold and silver are a common way to store wealth.
  • Investment Securities – these are typically divided into Stocks (also known as Equities or Shares), Funds and Bonds. Investing in Stocks actually represents an ownership in a company for instance Facebook. Bonds represent money that is borrowed by government and companies from investors. These usually pay a fixed interest and can be bought or sold at any time. On the other hand, funds are a product that include a basket of investments that usually consists of both Shares and Bonds. They are a great way to diversify investments without having to invest a lot of money, while they are also a great way to invest with top fund managers worldwide.
  • Real estate – whether it is a modest 2-bedroom apartment you can rent out to holiday goers or a luxurious villa with the Mediterranean Sea as its backdrop, wealth can also be built through real estate.

 

How to build your wealth

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Building your wealth is not always about making more money to add in the money box. At times it is about adjusting your habits and using what you already have at your disposal to your advantage. So how do you go about it? Although there is no foolproof formula in doing so here are some tips that can help you develop strong, wealth-building habits.

Determine your net worth
Before you even set the pace for growing your wealth, you should start by understanding what you already have by simply calculating your net worth. To do so, you must add up your home’s value if you own it with any investment accounts you may have, bank account balances and any other assets. The next step is to subtract any loans and debt, including credit card debts.

Create a budget
To save and eventually grow your wealth you must understand how you spend your money and where you can cut back. A budget can help you identify two simple numbers – what money is coming in and what is going out. Once you have established this, you can then determine your fixed costs such as loan payments, utilities and similar expenses and start cutting down on variable costs like expenses related to entertainment, shopping and the likes. Another way of budgeting is to follow the 50/30/20 rule, where you should aim to spend about 50% of your incomes on your fixed costs, 30% on variable expenses and 20% for financial matters like saving and investing.

Start saving automatically
Linked with the above, saving is a crucial element to building your long-term wealth and having savings automatically drawn from your paycheck leaves little time for you to think about where to spend it, boosting your chances of saving more effectively and allowing it to accumulate as time goes by with little to no effort from your side.

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Pay off debt
Debt is set to be a major hindrance when trying to accumulate wealth since the longer it is left there unpaid, the more it increases, while it may also eat away at any gains you make, ruining your credit score and delaying your path towards building your ideal wealth. Paying off debt should be your top priority so make sure you create a payment plan and stick to it.

Keep money aside for an emergency
At times life just simply happens – you lose your job, a family member gets sick, a pipe bursts flooding your basement. Whether it is a savings account or a savings investment account, having a place where you keep some extra cash in case of an emergency is crucial.

Help your money grow
You may have thought that depositing your money in a bank account that gets very little interest each year is a safe and smart move but why let your money sit there when you can make it work for you? Whether it is a brokerage or a high-yield savings account, these types of accounts give you access to your savings, but also allow you to grow your money. Alternatively, you can invest since it has the potential to truly help you make more money.

Amassing a substantial amount of wealth that will make your life more comfortable, see you through retirement or leave as a legacy for the next generation would be much easier if you had an investment fund set up for you by your parents. However, starting from zero does not mean that you cannot develop and grow a financial foundation. Building wealth from nothing means that you have to be stricter with things like budgeting and saving, while you may have to consider coming up with additional sources of income. By taking advantage of investing sooner rather than later, you may be able to build a financial foundation that can serve you for life.

Irrespective of your choice, it is crucial to diversify your portfolio. A tried and tested technique, diversification involves reducing risk by spreading investments across a varying range of companies, sectors, geographical locations and assets so that you can increase your odds of investment success. For instance, by holding both stocks and bonds, you reduce the chances of your portfolio taking a big hit should markets swing one way or another, while at the same time, by spreading your capital amongst different investments, you do not have to rely on any single investment for all your returns.

 

What is the best way to manage your wealth?

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Investing plays a crucial role when it comes to building your wealth and it has the potential to truly make your money grow. However, if you are unsure as to how to go about it, a wealth management advisor can handle complex financial issues on your behalf, while keeping your best interest in mind.

Serving as more than just investment advice, wealth management offers a holistic approach whereby a single investment manager coordinates all the services needed to manage clients’ money and plan for their current and future needs. At the same time, the service may also include tax guidance, estate planning, retirement planning and at times, even legal assistance. Taking into consideration all parts of a person’s financial life, it is your best bet to accumulating your wealth and managing it wisely.

 

A refreshing approach to wealth management

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One of Malta’s largest independent financial services group and a founding member of the Malta Stock Exchange, Calamatta Cuschieri pioneered the local financial services industry in 1972. Since then, the Group has constantly pushed forward, moving from strength to strength, gaining an excellent reputation along the way for consistently offering a bespoke and transparent service to clients at highly competitive prices. Today, CC has established itself as a 360-degree financial planner for investments, pensions and life insurance.

Since the Group’s inception, CC has been providing high-net-worth individuals, families, as well as corporate clients with personalised wealth management strategies, a full range of investment products and custom investment solutions, while gaining an excellent reputation for offering clients the ability to enjoy their life while we protect, grow and manage their wealth.

Thanks to our knowledge and experience and with the help and support of financial planning tools, we help our clients attain a better grasp of their wealth objectives be it for growth, capital preservation, income or a mixture of these.

 

Discretionary Portfolio Management

As financial markets continue to change rapidly, managing your investments has become an increasingly complex and time-consuming process to handle on your own. At the same time, in today’s volatile markets, agility has become increasingly important and decisions often need to be made at the drop of a hat. For this reason, a Discretionary Portfolio Management service can manage your assets and make proactive investment decisions based on your financial objectives and risk profile through separately managed accounts that focus on equities, fixed-income investments and balanced portfolios.

By having the necessary resources in place, we can act quickly to the ever-changing market conditions so as to ensure your investments remain safe and continue growing. Our discretionary service offers six distinct strategies that cover the main asset classes, namely equities, bonds and cash with varying levels of risk.

So why opt for CC’s wealth management service? From benefiting from a dedicated team of investment managers who will actively oversee your investment portfolio to receiving a quarterly report which also includes a portfolio valuation and transaction history, a market commentary and a manager’s report justifying the investment decisions taken, we offer clients maximum flexibility and the liberty to change your strategy whenever you please. What’s more, our charging structure is transparent, while our trading fees are highly competitive.

Furthermore, clients can also monitor their portfolio online through our proprietary software CCTrader where you can track the performance of your investments, as well as keep in tune with your manager’s decisions. Having said that, your advisor is always available to discuss your latest report, your chosen investment strategy or anything else you need face-to-face. Here is how you can get in touch with the Wealth Management Team.

 

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Managed Fund Portfolio

Managed by our in-house team of experienced investment managers, the Managed Fund Portfolio (MFP) aims to maximise growth and return possibilities for investors. Available in 3 well-diversified types of strategies namely conservative, balanced and growth, an MPF can help you generate income, capital growth or both depending on your goals. Providing you with exposure to multiple fund houses as opposed to one as is the case when investing directly into a mutual fund, our selection of funds means that you can benefit from a strategy that is thoroughly analysed, selected and monitored by our team.
At the same time, our investment ideas are reviewed on an ongoing basis, reflecting the continuous market opportunities that present themselves, while our strategies are monitored on an ongoing basis with monthly rebalancing when necessary.

In addition to offering investment management for both funds and professional clients, our services also include cash and liquidity management, whereby CCIM provides a range of solutions that can help you boost your interest earnings, make better use of intercompany funding and improve the overall management of the treasury. On the other hand, armed with the latest news and developments in the markets, our internal research analysts support our investment management teams to help clients weather the challenges of the world’s increasingly complex debt and equity markets. Lastly, our risk management processes enable us to monitor, measure and take the appropriate steps to mitigate and control any risks.

 

You do not need to earn six figures to turn your dreams into reality, but planning today with your future goals in mind can get you there sooner. And although there is no magic formula that can help you accumulate wealth quickly, there is a basic yet effective method to do so – make more money than you spend, avoid debt and invest your savings wisely by taking on a bit of risk and making prudent investment moves.

Visit CC’s head office situated in Birkirkara for more information about our Wealth management service and to find out which investment strategy can help you make the most of your money. Get in touch with us.

 

The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.

Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.