Wealth Management Products

Even if you have yet to sit down with a wealth management professional for a thorough discussion of your wealth management options, chances are you may have a rough idea of the various vehicles people use to preserve and increase their wealth. If you aren’t aware of these specific strategies, you are probably at least aware that there are wealth management strategies out there that you should familiarize yourself with, eventually. Unfortunately for people who like to procrastinate, there are real, significant monetary consequences when it comes to procrastinating with wealth management strategies. Part of the psychology of procrastination involves a reluctance to get started; once you’ve built up some momentum, the process becomes much easier. The best way to start is with a broad overview of some of the basic wealth management strategies—just knowing you have options puts you in an advanced position. After reading this list, if you’re interested in learning more about wealth management strategies for you or your business, then contact a Clifton NJ wealth management professional for more information.


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Money Market Accounts


Understanding wealth management products can be better understood by the newcomer if it is understood that many people are using a wealth management strategy without even thinking about it: a bank savings account. Having money in the bank is an afterthought for most people, yet in practice it is a conscious wealth management choice, for better or worse. The benefit of a savings account is similar to the benefit of this first wealth management product, a Money Market Account or MMA. Both a bank savings account and an MMA carry a low risk. As an alternative to a savings account, federally insured MMAs are used by some to hold emergency funds. Their benefit versus a savings account is that MMAs have a slightly higher rate of return; the consequence of this are more restrictions related to penalties, minimum balances and number of transactions allowed. While they have a low return of investment relative to the next few wealth management products, they also have the lowest amount of risk. This correlation is generally true of all financial products.




CDs (Certificates of Deposit) are also low-risk wealth management products. Sold by banks, CDs provide a higher rate of return than a savings account on the condition that the money remains in the CD over a long period of time—often months, years or even decades. The main benefit of a CD is its low risk; it is an option for people looking for a safe place to keep money they will not need over a long period of time.


Mutual Funds


Mutual funds have a higher risk than the previous wealth management options discussed, but they also usually provide a higher return on investment. Mutual funds involve groups of people combining their money with a wealth manager who then invests the money using other investment vehicles like stocks, securities, bonds and other products. Just like with various financial products, various mutual funds have different levels of risk. It is important for investors to understand what their mutual fund is specifically investing in. Beyond mutual funds, there are other higher risk/higher reward options, many of which are designed for companies or high net worth individuals. These are products like private equity funds, hedge funds and products structured specifically for an investor.

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