Typically, a person with investible assets worth US $1 million* or INR 7 crores or more is considered as a high net worth individual. If you fall in this category, then you are probably usually swamped with your professional obligations – be it in your leadership role in an organisation or in your own individual or family business. Being a woman HNI only further increases this considering you might also have several responsibilities on the personal front as well.
Whilst you may be dedicating majority of your time towards your work, it is also necessary to devote some time and attention to manage your personal finances prudently.
As a successful professional/entrepreneur you would know that there is no secret formula for overnight success, it takes hard work and patience to build your wealth. However, today the new mantra is to ‘Work Smart’ rather than merely ‘Work Hard.’ So how can we smartly manage our finances?
As a woman HNI here are some quick tips to help you manage your personal finances better:
Know your goals
As an HNI you are probably used to a certain lifestyle, so you need to ensure your financial planning provides you with the means to maintain such a lifestyle even in your later years. Look to fulfil a dual goal of wealth preservation as well as additional wealth creation.
Separate the personal from your business
If you are an entrepreneur, you might find yourself from time to time reinvesting your wealth in your business. However, ensure that you maintain your personal funds separately. Avoid offering your personal assets as security in your business transactions. This can help safeguard your personal net worth in case your business faces adversity.
No risk no gain
You are likely to have an investible corpus significantly higher than what you may need as a contingency fund. You are also likely to have a higher holding capacity. You may consider venturing into equity oriented mutual fund schemes. Although these funds can carry higher risk, but when held over a long term they aim to provide reasonable returns and can help you achieve your goal of wealth creation.
While you consider equity-oriented funds, do not forget to diversify. You have a larger corpus to deal with so take the benefit of diversity and invest in different types funds including debt funds. This will help you preserve your hard-earned wealth as well.
Track your portfolio
Don’t sweat the small stuff but maintain an overview of your portfolio to ensure your wealth is being preserved. As you deal with a significantly large quantum of funds, your profits may be significant but so can your losses.
Your income would fall in the 30% bracket so you could be liable to pay considerable taxes. Take help of a professional to plan your finances in the most tax efficient manner.
Invest in a financial advisor
If you cannot devote the required time, then consider this option and allow a team of professionals to take over your financial planning and portfolio management. There are several high-profile investment management companies whose core focus is portfolio management of HNIs.
It refers to the passing assets / investments down from one generation to another where you decide how much of your estate – be it property, car, financial investments, etc. – you want to pass on to whom and how, after your demise. At times, it’s may not be enough to have joint ownership or having nominees for your assets/investments. To avoid family disputes over your estate, it’s important to plan your estate. You can hire an estate planner to help you with the process.
The more money you make as an HNI, the more you are likely to spend. So, it is not more money but more assets that increase your personal worth. So, don’t squander your wealth and follow these guides to get yourself started on a prudent financial planning journey today.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.