Having Money and Properly Managing It are Two Different Things

Just because you have lots of money doesn’t mean you’re necessarily a financial wizard. Society is littered with famous celebrities who have squandered massive amounts of money through various means, such as bad investments or poor spending habits. I’m not saying we need to be sympathetic to celebrities who make millions, but their stories, when looked at together, can provide an important lesson for all of us. That is, that having money and being able to properly manage it and care for it are two different things. In other words, just because you have money doesn’t mean you will know what to do with it. This can also be case for average, middle class workers that make up the backbone of American society. There’s also plenty of stories out there of retirees decimating their nest eggs once they reach retirement by spending more than they saved or making poor investment decisions. Here is where knowing what you don’t know is important. If you know you aren’t good with money, make sure you hire a wealth manager or certified financial planner who can help. They can help you set a plan and understand your appetite for risk and avoid investments that may not provide the right return for you as well as help you decide to dump certain investments that take a turn for the worst. A good wealth manager or certified financial planner can also help you to grow your nest egg by also suggesting investments that fit into your plans and meet your risk tolerance. It’s important that you find someone you are comfortable with and who you trust with your money. Now, I’m not saying here that all retirees don’t know what to do with large retirement savings accounts. Of course, there are also many stories of people out there taking a small sum of money and turning it into millions through smart financial decisions. Or of retirees being practical in retirement and making their savings last. However, it can be easy to get caught up in thinking that just because you have money means you know what to do with it.