This is not your typical New Year’s resolution article. The concepts in those articles are good, and I work with many of my clients to help them budget, save, and plan because those are fundamentally the right things to do. Many of those articles are out there, and that topic is covered extensively this time of year. With that said, I wanted to focus on a different topic and use the new year as the motivation to up our focus and set some goals around another financial idea: making an impact with your wealth.
Let us start by dispelling the idea that “making an impact” with your wealth is reserved only for people of a certain affluence. While increased wealth does come with more freedom to do more with your wealth, the concept of using wealth to have an impact is not limited. For this exercise, we will broaden our definition of impact and define it as benefiting others. Also, let’s not restrict wealth to being exclusive to money. Instead, wealth can be other things you have an abundance of, such as time or talent.
From here, we want to discuss two areas where you can use our definition of wealth to impact others. The more traditional thought processes are through causes such as charitable entities. This year could be the year when you decide to have an impact on your favorite causes. You can do this in several ways: donating money, giving time and talent, or advocating. As the money guy, I can tell you that there are several vehicles for donating money, and depending on your situation, you can use these: donor-advised funds, gifting appreciated stock, or learning more about impact funds. You can also give time and talent, which can have an even greater impact than money. An often-overlooked way to have an impact is by advocating for a cause. Think of your words and actions as a multiplier of your dollars and tell people you know about your cause, why you support it, and why they should consider doing the same. On our website, we advocate for a few of the causes we care about most, but there are others. Use your voice and network to make an impact for the causes that matter most to you.
The next area I want to focus on for making an impact is ensuring our wealth is protected so that it can impact those we care for most. To make an impact here, remember that your income, savings, and assets will impact loved ones if something happens to you. That impact can be positive with planning and leveraging the tools available to you or negative if you fail to plan. In my opinion, it is your advisor’s job to ensure you have an appropriate estate plan. Make it your goal in this new year to get this done. Beyond the framework for an estate plan, it is also important to ensure that all of your assets are titled correctly and have a beneficiary assigned.