Using business principles to maximize your family wealth

They say money can’t buy happiness and I certainly agree. However, the lack of it sure can make life challenging.

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 Simple goal-setting without tools to promote good decision making will not create wealth, and getting into the weeds of buying specific stocks is a diversion best avoided given your limited chances of beating the market. Creating wealth and financial security for yourself and your family is not derived from purchasing specific financial products, but by employing a holistic framework that results in good, consistent decision-making throughout your lifecycle of financial needs. As a professional investor and young professional trying to make sense of my own financial decision making, I realized along the way that many of the financial principles employed by successful companies are also relevant to personal financial planning and management.

Delaying savings until later in adulthood puts you at a substantial disadvantage in the quest for financial security.

By approaching your family’s finances using the principles of corporate finance, you won’t have to think about the financial impact of every decision you make. Rather, you can identify the big decisions and their implications in your financial life so you don’t have to dwell on money every day. Financial security is not achieved through any specific product, but rather through a lifetime of identifying important decisions, developing a plan with enough cushion for surprise, monitoring your progress and modifying it with new information.

                                               

By Douglas P. McCormick - Professional investor and author of Family Inc.: Using business principles to maximize your family wealth