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

Last Updated on January 25, 2023

We all understand in a narrow sense that if someone has a lot of money and assets we refer to, that 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” became “Welth” and later wealth. The person or family who possesses prosperity and fortune is 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 possessed, people measured 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 wealth in terms of money. And at the present time, the value of wealth is found out by calculating the “net worth” of an individual, family, corporation, or a nation.


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

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 earn money to maintain their livelihood and fulfill their desires and, for that purpose, they keep 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 the creation of wealth, which in turn helps to fulfill people’s desires and wants. It takes 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 do 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 taking 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 result in the creation of wealth.

What are investment Objectives?

Investment Objectives

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

  1. Extra source of income generation.
  2. Long-term capital formation.
  3. Specific purposes like marriage, child education, buying 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 aims in their life they want to achieve. Does he or she have proper resources and knowledge of making investments? How much financial risk are they willing to take? Should they start investing in a small amount of capital or invest from lump-sum money or which avenue should be chosen for investment, whether stocks, digital assets, mutual funds, etc.

Meaning of wealth management

Wealth management is a strategic plan which is created 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.

There are professionals who have a specialization in 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.

The 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, and nation is also fluctuating.

Managing wealth is a crucial task and to perform it, financial planning is required. 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 are 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 provide 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 financial products: There are varieties of investment products available to invest in. Understand and learn about these financial products, as each financial products has its own characteristics and processes. The return from the investment is based upon the nature of the product. Risky investments can provide maximum returns and low risk investments will provide an average or low return.
  4. Determine and investigate various factors: Different factors affect 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 are 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 sources of income in your family? How many earning and dependent members are there and what is your age? The life-cycle and position of the 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 allocating funds to different financial products in such a manner, 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.) fails, then the investment will be backed up by another 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 sources of income. Plan for taxation in advance, so that any problems can be avoided and money can also 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 assistance and ensure 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 with the financial plan and have confidence in the strategy. Let the investment value grow overtime, so the best results can be made out of it.


In the end, all I have to say is that understanding the concept of wealth management not only helps you to build and maximize it but also guides you to make smart financing decisions.

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