Personal Finance in Estate Planning
The way you handle your personal finances is central to development of your overall estate plan. There is great opportunity in this area because you can control your expenditures to some extent at least. And, if you save money, and invest it wisely, that money can grow into a nice sized estate.
Most likely we will only achieve financial security if we incorporate our estate plan into our every day financial decisions. The financial choices we make each day, over time, have a dramatic impact on our estate plan and our ability to achieve financial security for ourselves and our families.
Every time we spend money, we make a choice and the cumulative effect of all those choices are significant over time. This is particularly true when you factor in the miracle of compound interest which, over time, enables your investments to grow and grow on their own.
For most people, financial security has more to do with what we save than what we earn.
Certainly earning a higher salary will increase your opportunity to save money. However, a higher salary will also likely increase your incentives to spend. You can read about this financial dilemma at Effective Estate planning.
Efficient personal finance habits will enable you to save money and accumulate (purchase) productive assets. Owning productive assets (or capital), is the big key to accumulating a significant estate and achieving financial security. Income alone won’t do it. You can read more about why owning capital is the key to your estate plan (and retirement) at Estate Planning 101.
People at every income level struggle to save money and accumulate capital. You'll see what I mean if you read:
The truth is that you can achieve or fail to achieve financial security no matter how little or how much you make. It all depends on how much you can save and how you invest those savings. This is the personal finance aspect of estate planning.
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