How are you feeling about your financial future? Economic uncertainty seems to be a constant, and you may find it difficult to determine exactly how stable your financial situation is.
If that’s the case, you’re not alone. When the market and economy are unpredictable, it’s natural to focus on keeping your immediate financial situation stable.
But taking a short-term view can have long-term consequences — if you want to secure your financial future, you need strategies that protect wealth in any economic climate.
Whether you’re a high-achieving professional, just starting your career, or close to retirement, it’s crucial to prioritize financial stability, both now and in the future. Let’s look at some essential strategies that can help you build resilience and protect your wealth no matter what happens with the economy.
Long-Term Resilience Creates Financial Stability
It’s often easy to see the impact of market instability, tax changes, inflation, and economic downturns on your current financial situation. But it’s equally important to understand how these things can affect your long-term financial goals.
Focusing too much on your short-term financial responses can leave you ill-equipped to handle long-term threats to your net worth. This is even true for high-earners and pre-retirees — without a big-picture approach, today’s financial decisions can deplete assets and negate purchasing power.
Creating a comprehensive financial strategy can prevent you from simply reacting to every change in the market. Consider these strategies for financial resilience:
- Creating multiple sources of income
- Developing flexible spending strategies
- Adjusting investments to adapt to changes in the market
You don’t necessarily have to take all of these steps — a financial advisor can help you determine which approaches align with your unique circumstances and goals.
Action step
Future-proof your wealth by developing a strategy that can adapt to economic shifts: growth and downturns.
Financial Stability Requires Strategic Income and Investments
If you want your financial situation to remain stable in various economic conditions, you need to mitigate risk. For example, if you have more than one source of income, there’s less risk that losing your job will impact your long-term financial situation. Likewise, having different types of investments can help you weather market volatility better than putting all your money in a single type of asset.
This is where multiple income streams might be the right solution for you, like:
- Investing in real estate
- Adding dividend-yielding stocks or bonds to your portfolio
- Starting a business or side gig
- Offering your services as a consultant
- Finding passive income sources, such as online course creation or affiliate marketin
While building multiple income streams can be a good strategy for many people, it does have some drawbacks. This could be a good time to consult with a financial advisor — a CERTIFIED FINANCIAL PLANNER® can help you determine which (if any) of these options is right for you.
A CFP® professional can also help you create a strong, resilient investment portfolio. Depending on your circumstances, they may recommend diversification strategies like:
- Balancing equities, fixed-income investments, and alternative assets
- Using low-cost index funds and exchange-traded funds (ETFs) to prepare for market swings
- Adding annuities or structured products, which may help with retirement income stability
Investing is a complex field — hiring a professional can save you stress and help ensure your portfolio is optimized for your financial goals.
Action step
Work with a CFP® professional to improve your income and investment strategies. Seek out a CFP® professional who has their Series 65 license (Uniform Investment Adviser Law Examination) — this ensures that they are qualified to provide investment advice.
Tax and Savings Strategies Protect Wealth From Future Changes
Saving more money now can help bolster your net worth. However, changing tax laws can make it harder to keep more of your money now and in the future.
If you want to increase your overall financial stability, it’s important to incorporate realistic strategies to save more cash — and protect those funds from taxes.
Building an emergency fund can help keep you financially stable in the weeks and months following an unexpected financial challenge. These steps can help you optimize your rainy day fund:
- Save liquid funds you can access easily — experts recommend keeping between 3 and 12 months’ worth of living expenses.
- Consider expanding your emergency funds beyond cash to include short-term bonds and/or accessible investments.
Action steps
For emergency funds: Talk to your financial planner to determine which emergency fund setup is best for you.
For tax strategies: You may want to work with both a financial planner and a CPA to ensure that your financial plan includes an effective tax strategy. They may recommend steps like contributing to tax-advantages accounts (e.g., 401(k), IRA, HSA) to reduce taxable income or implementing Roth conversions to reduce future tax burdens
Taxes are complicated, and the laws change frequently. If you want to make sure your finances are protected and maximized now and in the future, work with a CFP® professional and a CPA to create and implement strategic tax and savings plans.
Estate Planning to Protect Money — and Future Generations
What if you want to focus on long-term wealth protection? That’s where estate planning comes in. A financial advisor can help you with legacy planning that protects your assets and ensures they go to your heirs according to your wishes. Your advisor may recommend some of these steps:
- Setting up trusts to protect assets and minimize tax liability for your heirs
- Developing a gifting plan to support people and causes you care about
Action step
Don’t wait on estate planning! It can feel overwhelming, but a CFP® professional with legacy planning experience can walk you through all the steps.
Long-Term Financial Security Starts With a Plan
Financial planning is about more than just following a budget or planning for retirement — it’s the key to financial security. With a comprehensive strategy based on your resources and goals, you can feel confident that your finances are ready to withstand economic changes.
Here are some of the ways a financial planner can help you improve your financial stability:
- Creating a customized plan that aligns with your financial values
- Reviewing your plan and making updates to adapt to market conditions
- Helping you protect against market downturns and unexpected life events
- Creating a savings and investment plan to help you live the life you want in retirement
- Adjusting your retirement withdrawal strategy to minimize taxes and maximize funding longevity
- Offering personalized investment strategies that balance risk and reward
- Helping you preserve your wealth for future generations
Action step
If you want to ensure financial stability now and in the future, start working with a financial planner! If you already have an advisor, remember to schedule a check-in at least once a year to adjust your plan based on your goals and the market.
Build a Financial Plan That Stands the Test of Time
It’s impossible to predict what will happen with the economy, but that doesn’t mean you’re limited to just reacting to market changes.
With a financial planner on your side, you can develop a comprehensive plan for your income, investments, and savings. Pairing smart tax strategies with customized investment strategies helps you build financial stability and stay on track to reach your goals.
If you’re ready to experience the power of personalized financial planning and feel confident that you’re ready to handle any economic situation, schedule a consultation with our team.