In close to a decade of coaching high net-worth individuals, I’ve noticed one common problem. High net-worth individuals are incredibly talented when it comes to making money and collecting assets, but 99% are struggling to manage their wealth.
Why are these people floundering? Because most high net-worth individuals – like other people – insist on managing their wealth in isolation, without relying on professional guidance and support from a financial advisor or coach. It’s an understandable approach. After all, most people are reasonably intelligent and well informed. You probably read the newspapers and magazines. According to a recent survey conducted by the Oriental Daily News, a new Mandarin language publication, most people rely on magazines and television information to gather financial planning knowledge. You may occasionally attend seminars conducted by financial experts and you can surf the Internet to find out great stuff about shares, bonds, insurance, unit trust funds and the host of other asset classes lurking seductively out there.
In addition, there are many reasons why you want to manage wealth without interference. First, you may enjoy managing your own wealth a great deal. Or you may feel that you can do it better than the experts, including professional financial advisors. Maybe you do not feel comfortable disclosing your personal financial information. Or, you feel that you must be in absolute control at all times, especially where your wealth matters are concerned
As a financial coach with years of experience under my belt, I know the limitations of managing wealth without professional support. I’ve seen high net-worth individuals make so many mistakes and errors out of ignorance of the big picture. Many people think that wealth management is nothing more than saving and investing or accumulating more wealth. But wealth management is more than that. You have to think about wealth distribution issues, such as making out effective Wills and Trusts that ensure your money and assets reach your loved ones intact – and successfully. And you have to think about ways and means to handle your debts and contingent liabilities, which are matters that are truly salient to high net-worth people involved in business. Many business owners ignore the issue of contingent liabilities and personal guarantees, which can drain your capital upon death. Your assets will be sold – some at ridiculous fire-sale prices – to settle your debts and liabilities upon your death, to the extent that there might be nothing left to maintain the future lives and sustenance of your heirs.
This is why it is especially important that high net-worth individuals get professional advice and an objective viewpoint so that you can avoid mistakes and big blunders like these that can postpone the achievement of your financial goals or, worse, devastate your dreams and your family’s future.
This book intends to counter the traditional method of managing wealth without support by illustrating the existing problems and suggesting a better and more effective way. Its recommendations may be radical and unthinkable, especially for people who have become used to managing their wealth without support. But they’ve worked for hundreds of satisfied high net-worth individuals who now enjoy financial freedom and that’s what matters most.
Part One of this book covers FIVE main reasons why you, the high net-worth individual, can’t manage your wealth. Part Two dissects NINE damning common mistakes made by those who manage their own wealth without support AND offers solutions and guidance. These solutions are collective wisdom from my many years of advising high net-worth individuals and families. These real-life examples may mirror your own life in describing mistakes made, the opportunities not capitalised on and the danger of succumbing to short-term temptations which can shoot down your longer-term strategies. In Part Three, you learn the Ultimate Solution, whereby I recommend that you work hand-in-hand with a financial advisor to formulate and implement an effective and personalised wealth management plan that best fits your rich values, your unique goals and your desired lifestyle as a high net-worth individual. There’s more. Part Three also tells you the ins and outs – the insider information – of the financial planning industry, gives you valuable pointers on how to select a genuine financial advisor who has your best interests at heart and teaches you how not to succumb to an agent whose priority is his commission. It makes it easy for you to select, appoint and work with a financial advisor who can make a positive difference to your life.
I understand that the idea of turning to a financial advisor may be alien to many high net-worth Malaysians. But in developed nations, the financial advisor plays an important role in the financial wellbeing of affluent families. He is the primary advisor for their personal financial affairs. According to statistics from the Financial Planning Association of Malaysia, 22% of Americans and 33.8% of Australians use financial advisors as their key source for personal financial advice.
Don’t get me wrong. I’m not advising you to simply hand your assets over to a financial advisor to address all your financial needs and remove all your anxieties about your money. That approach does not make any more sense compared to the opposite extreme of trying to do everything yourself. Rather, I recommend that you work in concert with your financial advisor to manage your financial future.
Finally, I need to tell you what this book WON’T do. It will not offer you get-rich-quick tips nor will it explain how or when to buy and sell your stocks. Nor will it instruct you on how to create and implement a financial plan from beginning to end ALTHOUGH it will tell you the most effective way to do it. It’s simply not that kind of book. This book is about identifying the reasons and mistakes behind your less-than-optimal performance in wealth management. It’s about exorcising current approaches that don’t work and replacing them with the Ultimate Solution, which is an approach that does work AND takes cognisance of your personal values and goals. It’s about taking control of the financial planning process and your financial future. It’s about recognising a new and effective approach to managing your wealth and most important of all, your life.
This is the first time I have shared my secrets to wealth management success – which are specifically skewed towards the needs of high net-worth individuals – on such a widespread basis. It is my goal for you to use this book as a guide in laying a foundation for a completely workable plan to lead you into an inspiring financial future. The good news is that it’s never too late; today is always a good time to start.
Let’s get started!
Yap Ming Hui
Note to Readers:
The author prefers to use the term “wealth management” instead of “financial planning” because the phrase “wealth management” specifically means financial planning for high net worth individuals. On the other hand, financial planning is more generic and refers to the system and methodology of planning one’s finances. Using the term “wealth management” also accurately reflects the book’s purpose and direction – which is to guide high net-worth individuals to manage and optimise their wealth.