Wealth Management Executive Joey Feste Highlights Essential Tips for People New to Money Management
Wealth management skills are a core aspect of financial literacy, and fundamental to making sound investment decisions. Developing a comprehensive management strategy will help one define their long-term objectives, increasing their chances of sustained profitability and growth.
Joey Feste, a Senior Managing Partner with wealth management firm KM Capital Management and over thirty years of professional experience, provides three essential tips for people new to the world of money management.
Understand the Essential Details
Most people who are reluctant to manage their money rely on a vague, hazy impression of how much they make, save, spend and owe. To say this habit and approach is a mistake is an understatement. It is a financial catastrophe in the making.
According to Joey Feste, individuals who guess their financial details almost always grossly underestimate how much they have and overestimate their net worth and earning power. Eventually, they are forced to face reality and it is unpleasant. Getting all of the details down and mapping them to a realistic, robust budget and investment plan is critically important. Individuals who have difficulty in this area should seek support and guidance from a qualified and experienced financial advisor.
Focus on Both Sides of the Wealth Building Equation: Saving and Earning
Many people who diligently save year after year often sacrificing things like vacations and the latest technology and appliances — find later in life that their financial situation is far worse than it could and should be. What is behind this wholly unwelcome surprise? It is the surprisingly common practice of focusing on saving, while paying little or no attention on generating more income and overall wealth over time.
Joey Feste claims that many people who think that they are managing their money are actually just putting it in storage, because all they do is save. Granted, this is certainly better than wasting their hard-earned money on unnecessary purchases or living beyond their means. However, what they should also be doing is looking at ways they can increase their earning potential, and also how they can wisely invest so that their money makes even more money.
Know the Difference Between Good Debt and Bad Debt
Some people are terrified of going into any kind of debt, while other people are on the other end of the spectrum: they are constantly in debt and waste an astonishing amount of (almost always) after-tax dollars on interest costs. The key to successful money management lies somewhere in the middle of these two extremes.
Joey Feste states that debt is a tool that can be positive or negative. For example, some people wisely borrow money to upgrade their skills, which in turn dramatically improves their lifetime earning capacity and overall job security. And then there are some people who treat credit cards as magic wands for impulse purchases, or who buy a house, car, and other big-ticket items that far exceed their level of affordability. Understanding the difference between good debt and bad debt and knowing how to leverage the former and avoid the latter, is critically important to anyone who wants to confidently manage their money and end up ahead, rather than behind.