Personal Finance vs. Wealth Management

Earlier in April, we discussed the difference between personal finance and wealth management. Today, we’re going to compare personal finance and wealth management.

Personal Finance:

Personal finance focuses on an individual's or a household's overall financial situation, encompassing various aspects of financial management. It involves managing finances, setting financial goals, budgeting, saving, investing, retirement planning, insurance, and estate planning. Personal finance aims to achieve financial stability, security, and success for individuals at various life stages. It's about making informed decisions to optimize financial well-being and achieve personal financial goals. Here at Prosperity we are personal finance coaches.

Wealth Management:

Wealth management typically applies to individuals with higher net worth or substantial assets. It involves comprehensive financial services that go beyond the basics of personal finance. Wealth management includes investment advisory services, tax planning, estate planning, risk management, retirement planning, and often entails a more sophisticated and customized approach. Wealth management services are usually provided by financial advisors, wealth managers, or firms specializing in managing significant assets. The goal is to grow and preserve wealth while addressing complex financial needs and goals.

In essence, while personal finance covers the fundamental principles of managing one's finances, wealth management is a more advanced and comprehensive approach tailored to individuals with higher assets. Wealth management delves deeper into strategies for optimizing investment portfolios, tax efficiency, estate planning, and other sophisticated financial services tailored to higher net worth individuals. So personal finance is your overall situation, money management is the day to day, and wealth management is the big picture long term.