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What Is High-Net-Worth Wealth Management?
High net worth wealth management involves many disparate elements.
They might also turn to alternative investments like fine art, collectibles,precious metals, as examples.
Specialized investments not only help diversify their investing portfolio, they can also help manage risk and boost returns.
Most high net worth individuals choose to work with experts due to how complex they are.
Here are some common strategies.
Choose Tax-Advantaged Investments
One of the best ways to avoid tax is tobuy investments that arent taxable.
Municipal bonds, for example, are federally tax-free and are also state tax-free in their state of issue.
Treasury securities are federally taxable but are always free from state tax.
Meanwhile, money in the account grows tax-deferred until its withdrawn.
Contributions are typically tax-deductible, and donating appreciated securities can also help you avoid payingcapital gains tax.
Estate Planning
Estate planning is particularly important for HNWIs.
The higher your net worth grows, the higher your tax bracketand the amount youre obligated to paybecomes.
The proper use oftrusts, wills and other estate planningtools can help HNWIs transfer wealth efficiently.
Wills also take effect after you die, whereas a trust can be in place while youre still living.
A power of attorney, for example, directs someone to handle your financial affairs if you become incapacitated.
Anadvance health care directiveallows someone of your choosing to make medical decisions on your behalf if you are unable.
Wealth Preservation
Wealth preservation and risk management go hand in hand.
This is where wealth preservation and risk management come into play.
As these strategies are complicated, they should be used in conjunction with a life-licensed financial expert.
Smart Asset Allocation
HNWIs typically use smart asset allocation to diversify their portfolios among non-correlated assets.
Working With a Wealth Manager
High net worth individuals almost by definition have more complicated financial lives.
Final Take
Theoretically, all Americans theoretically have the same access to wealth-planning strategies.
Being wealthy does often mean your finances are more complicated.
Its usually best for these types of investors to consult with financial professionals.
Takeaway
Finding and working with a financial advisor is a great idea.
A financial advisor will help keep track of your finances and assist you in attaining your financial goals.
Get to know your Financial Advisor options today for Free!
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