Managing your wealth is an important consideration for many individuals, regardless of net worth. In today’s times of economic uncertainty and rising costs of living, it is invaluable. In this guide, we will walk you through some of the ways you can more efficiently manage and build your wealth in 2023. If you are thinking of building a sound financial future for yourself and your loved ones, read on to learn more about how you can not only retain your wealth but potentially grow it.

Put careful consideration into saving

One of the best ways you can start retaining your wealth – even if you are not actively growing it – is to be conscious of how much you are spending and cut back on unnecessary expenses. If you are somebody who has never had a budget, now would be a good time to start one.

Good fiscal management starts with knowing how much money you have, how much you are earning, and how much you are spending. If you are spending more than you can earn, you will never be able to grow your wealth.

Some ways you can put careful consideration into saving is to make a budget that is realistic for you and stick to it. You can use apps to track your spending, cut back on unnecessary expenses such as dining out and impulsive purchases, and you can set up an automatic transfer each month you get paid.

The most important thing is to be realistic about how much you will spend. You should also always budget for emergencies and have a fund you can access easily. And just because you are saving does not mean that you cannot have fun – you should also set aside a small sum of money you can use for leisure and entertainment, which can keep you motivated in the long term.

Minimise taxes

Another way you can retain and manage your wealth is to minimise your taxes, as they can certainly eat into your wealth over time. You can minimise your tax burden through legal strategies such as tax-efficient investing, maximising retirement contributions, and taking advantage of tax deductions and credits when available. By taking advantage of these schemes and investing smartly, you can preserve more of your wealth.

When in doubt, you should talk to a financial advisor before conducting any moves. Tax evasion is illegal in Singapore, and tax evaders will face a penalty equal to three times the amount of underpaid taxes and/or ineligible tax benefits. This is in addition to a $10,000 fine, and/or even a prison sentence of a maximum of three years. Therefore, you should be careful about minimising your taxes legally.

Invest in the stock market

Another common way to build your wealth in the twenty-first century is to invest in the stock market. Many investors like to buy shares of companies that are doing well, so that their shares can grow in value. For those who are more risk-averse, they may invest in funds that track the performance of stock market indices, which tend to be less volatile.

Though many investors have found success in the stock market, there are still risks involved. The price movements of companies are not linear and can be hard to predict. When you are investing, ensure that you understand what the mechanisms of the markets are and how trading works. You should also make sure that you are not taking more risk than you can stomach, and that you do not trade with more money than you can afford to lose.

Consider alternative investments

Aside from the stock market, you can also consider investing in alternative assets. These include private equity, hedge funds, and real estate. They can provide diversification to your investment portfolio, and you can derive potentially higher returns than investing in the stock market, should your investments perform as expected.

One thing to note about alternative investments, however, is that they do come at a higher risk. You will also need more capital to get started, so this route is ideal for someone who can afford to do so. You should carefully evaluate any asset before investing, and you should also be prepared for the possibility of incurring losses.

Join a wealth management plan

A wealth management plan is a comprehensive strategy that is designed to help individuals manage and build their wealth. It can involve investing, as well as a series of other financial services that is tailored to the individual’s wealth management goals and risk tolerance.

Wealth management typically begins with a thorough assessment of your current assets, including your income, liabilities, investment portfolio, expenses, and debts. There is also typically a dedicated financial advisor assigned to each client, who will help with the process of developing a customised plan.

Joining a wealth management plan can be a good idea for a variety of reasons – retirement planning, tax planning, estate planning, and general risk management. Regardless of age, wealth management plans often incorporate a retirement income strategy to mitigate risk while generating long-term growth. For those with large incomes and ownership of property, they may also access services that include tax planning and estate planning.

Wealth management can be a great way to ensure your money is working for you while you are earning it, and to make sure that your finances are taken care of when you are gone. Contrary to popular people, it is not only for those with high net worths – in fact, more and more people are finding it helpful to build their wealth with the help of professional and tailored services regardless of their income level.

Open a trust

A trust is a legal arrangement that allows a trustee to manage assets for the benefit of one or more beneficiaries. Trusts are a great tool to incorporate into estate planning, as they can help individuals build and retain wealth for themselves and their heirs. There are many different types of trusts in Singapore, including special needs trusts, irrevocable trusts, charitable trusts, and revocable trusts.

Having a trust can not only retain wealth, but it can also help trustees to be exempt from estate taxes and protect their assets from creditors or lawsuits. On top of this, trustees can further build wealth by providing flexibility in the management of assets, investing in a diverse portfolio of financial instruments to potentially maximise returns over the long term.

If you have an estate or a lot of capital you want to preserve and potentially pass onto your children and grandchildren, having a trust can be a valuable tool. You can work with an experienced attorney and financial advisor to help you set up a trust, and you can arrange your terms to meet your specific needs and goals.

Bottom line

Preserving wealth and building it is an important consideration for many, regardless of your net worth. Not only can it help to ground you financially, but it can also bring plenty of benefits for your children and grandchildren, or your spouse and other loved ones. There are many ways for Singaporean citizens to safeguard their wealth these days, with the help of experienced financial advisors and attorneys. If you are planning on opening a wealth management account or a trust, you should always make sure that you take a tailored approach that works best for your needs and objectives.

Tatiana Campbell