A Wealth Equation

 There's an old-time wealth equation:

 "To have more than you've got, you must become more than you are".

Rich people have this figured out.

While many of us will read this aphorism and (rightfully) assume we need to start a personal development course or learn a new skill to achieve more financially in life, wealthy folks often just go get help.

Rich people have fiduciaries.  

They invest in trust relationships with professionals - fiduciaries- who look out for their interests and grow their money - for a fee.

Many people think these kinds of fees are a waste of money. Or they don't think they have enough money to spend on professional advice.

The rich know better.

High net worth folks (HNW) achieve more financially and multiply their knowledge and time by cultivating relationships with specialists  like attorneys, accountants, real estate brokers, and investment advisors. The government recognizes the value and protection provided by fiduciary relationships. In fact, the SEC wants to require more types of advisors to act as fiduciaries. In essence, a fiduciary places a  client's interests above all others, even their own. 

 Is this really such a big deal?

Does the average middle-class married couple really need to worry about their financial future, not to mention paying someone to handle tasks that one could learn from the Dummies Guide...?

The answer to the first question is "absolutely yes", and the answer to the second question is, " Get the Dummies books first, read them, and then see a professional".

 Consider retirement planning, for example...

 Retirement is one of the most important phases of life. 

It actually encompasses several phases of life, from an active lifestyle in the early years of retirement to a quieter, possibly assisted, lifestyle as a person ages. And for many of us, our retirement years may unfold over a third of our lifespan. 

This requires a plan!

Even so, half of your friends and relatives who are nearing retirement age have less than $10,000 saved for retirement and a third have nothing. 

HNW people don't make this mistake. They realize that retirement is too big to be left to chance. 

But they also know that they probably don't have all the skills, time, energy, or will power to do it alone.

So they capitalize on the expertise of their fiduciaries.

For instance...

• Attorney- Can you plan and write a legal will or trust that will not only pass your estate on to your heirs as you wish, but that will also allow you to continue to live as you wish, even if you become unable to look after yourself? Do you have the knowledge and time to follow the changing estate laws and rules, so that you can maintain and update your estate as laws change? 
• Accountant- Taxes must be paid and the rules are extremely complex.  Enough said.
• Real estate broker- Countless couples are finding out that their single biggest asset when they retire is the equity in their home. Selling the family home and buying a dream retirement home may seem impossible, but your real estate broker can show you how you may be able to purchase a nicer retirement home than you imagined, and make no payments. Will that help your cash flow?
• Financial planner- Where will your monthly retirement cash come from? Many people think that they'll need less money as they age, because they'll have fewer expenses. Not true. And most people are counting on social security and a retirement plan provided by their employer. But most workers don't have a defined-benefit retirement plan these days, so it's impossible to predict what you'll get from your boss. This means that, in order to make sure you'll have enough money in retirement, you'll have to save and build a nest egg on your own. And you will also need to make a plan to crack the nest egg open when it's time and manage your money as you spend it. This means staying away from sales people who promise fool-proof retirement plans and sticking with a qualified fee-based planner who will build and manage a plan with reasonable goals, risks,  triggers and stop-gaps and strategies to manage any changes in economics which may hurt your income as you age. Can you do this task yourself? 

And this is just the headache of retirement planning! What about wealth-building, running your business, managing your yearly taxes, or getting your kids through college?

Each of us has only so much time, energy, knowledge, and capacity. Spend a little now to make a lot and save a lot in the future.