10 simple methods of wealth management & maximization – [Building Wealth]

Last Updated on February 5, 2022

We all understand in a narrow sense that if someone having a lot of money and assets we refer to this person is wealthy. Having resources in abundance to consume is generally understood as wealth.

So, what exactly wealth is? Let’s understand.

Wealth Definition

The word wealth is derived from the English word “Weal” which means prosperity, fortune, impressive lifestyle, good well-being. In the thirteenth century the word “Weal” becomes “Welth” and later Wealth. The person or family who possesses the prosperities and fortune were considered to be wealthy.

“According to the dictionary: wealth means a lot of money, property, etc. that somebody owns; the state of being rich or a large number or amount of something.”

In the ancient period, to find out how much wealth someone possess, people measure it on the basis of owned land or commodities (wheat, corn, rice, etc.)or livestock one possesses.

Later, to find an exact measure of wealth, it was decided to calculate the wealth in terms of money. And at present time, the value of wealth is found out by calculating the “net worth” of an individual, family, corporate, or a nation.


The net-worth is the current market value of the assets, less the current market value of the liabilities they owned.

net worth formula

By calculating net-worth, we can measure and compare the wealth of an individual, family, corporates, and nations.

The population work hard to earns money for to maintain their livelihood and fulfill their desires and for that purpose, they kept savings out of their earned income.

Savings can only help people to fulfill their wants for a short period. So, to maintain their financial position in a good condition for a long period of time investments are made. These investments help in creation of wealth that in turn helps out to fulfill people’s desires and wants. It take a good amount of time to build wealth and to do so, knowledge and understanding of proper channels, nature, return and risk of investment is required.

How to generate wealth?

People perform work and in return earn money as income. Expenses are made out of these earnings and some part of the income is put aside as savings. After taken out expenses and savings the remaining income is invested in financial products which generate additional income. So, by making investments we can generate extra income and thus results in creation of wealth.

What are investment Objectives?

Objectives of Investment

The investment objectives are the financial goals which people wants to achieve i.e.

  1. Extra source of income generation.
  2. Long-term capital formation.
  3. Specific purposes like marriage, child education, buy a house, etc.
  4. Save money for the future.
  5. Grasp the knowledge of investment options available in the market and their working processes.
  6. Retirement planning.
  7. Become rich.

Investors’ must first determine what are aims in their life they want to achieve. Is he or she have proper resources and knowledge of making investments. How much financial risk are they willing to take. Should they start investment from small amount of capital or do invest from lump-sum money or which avenue should be choose for investment whether stocks, digital asset, mutual funds, etc.

Meaning of wealth management

Wealth management is a strategic plan which is being create by an individual to efficiently manage and increase his/her money-flow and resources through investment, for the purpose of fulfilling his/her financial objectives.

Their are professionals who have specialization of this field like CFPs, RIAs, CWMs, etc. They help in devising a proper and comprehensive financial plan and provide wealth management advisory services as well.

Future is uncertain and with passing time the world is facing new challenges. People around the globe are affected by these changing circumstances. As time goes on the wealth of the individual, family, nation is also fluctuating.

Managing wealth is crucial task and to perform it, financial planning is required. A Comprehensive research must be done to create an effective financial plan that helps in long-term wealth creation.

Methods of wealth management & maximization:

methods of wealth management

Whether you have prior knowledge or a novice in this field. You should learn and try some of the methods provided below:

Lets get started!

  1. Analyze your worth: Start by finding your current financial position. The source of income and utilization of the funds as expenses. Identify your assets and liabilities. This analysis will provides an overview of the financial position, so that careful financial decisions can be made.
  2. Determine the objectives: What are the financial goals you need to achieve through investment. List out the goals and set priorities. Is there any immediate financial goal you want to achieve?, or have a plan for future financial goals.
  3. Learn about the financial products: There are varieties of investment products available to invest in. Understand and learn about these financial products, as each financial products have their own characteristics and processes. The return from the investments based upon the nature of the product. Risky investments can provide maximum returns and low risk investment will provide an average or low return.
  4. Determine and investigate various factors: Different factors affects the performance of financial products. The economy- domestic or global, fiscal policies, Time-value, foreign exchange rate, interest rate, natural calamities, demand and supply, and many more. Point out what factors will going to affect your financial strategy.
  5. Assessment of risk: How much risk in terms of money are you willing to take. What are the alternate source of income in your family?. How many earning and dependent members are there and what is your age. The life-cycle stage and position of wealth-cycle.
  6. Create a financial plan: Prepare a financial strategy and invest in varieties of investment products accordingly. Exercise the financial plan prudently and appropriately as per your risk appetite. Monitor the financial plan periodically and take necessary actions to improve the strategy.
  7. Diversify: Always make diversified investments to minimize the risk factor. By allocation of funds in different financial products in such a manner, so risk can be diversified among the different financial products in your portfolio. If any one type of investment asset class i.e. (equity, debt, mutual funds, gold, etc.) failed then the investment will be backed up by other asset class.
  8. Taxation: It is an important aspect of wealth management. Assessment of taxes must be made, as there are different tax slabs, rules, and regulations regarding the various source of income. Plan for taxation in advance, so that any troubles can be avoided and also money can be saved.
  9. Get professional assistance: A financial planner can be approached to get help in financial planning and management of wealth. He/she will provide an assistance and ensures that adequate money is earned from the investments to meet various financial goals. A professional will suggest a suitable asset allocation based on risk-taking capacity and also provide money management services as per request. Using professional assistance will help in creating tailor-made financial strategies and trouble-free management of wealth.
  10. Patience: It takes time to build wealth and for that patience is required. There are uncertainties and no one can accurately predict the future. There will be fluctuations in the investment value with the volatility in the markets. All you need is stick to with the financial plan and have confidence in the strategy. Let the investment value grow overtime, so best results can be made out of it.


At the end all I have to say that understanding the concept of wealth management not only help you to build and maximize it but also guide you to take smart financing decisions.

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