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Investment Strategies to Grow Your Wealth Post-Divorce
As you transition to a new phase of life after your divorce, you need to establish a solid financial strategy to secure your future. In an interview on our podcast, “A Better Divorce” on the topic of Investing After Divorce, our guest, David Edwards, shared invaluable insights on managing and growing your wealth post-divorce.
David Edwards is now with Wealthspire, a New York City-based wealth advisory firm that provides financial planning, investment advice, and tax and estate planning services to his clients and families living in the United States, Latin America, and Europe.
Avoid Common Pitfalls During the Divorce Process
First and foremost, Edwards pointed out that one of the biggest mistakes that he sees people make in their divorce is unnecessarily fighting over assets, which can deplete financial resources. Edwards advises focusing on amicable settlements to preserve wealth. Additionally, avoid hasty decisions regarding investments and spending. Take the time to understand each financial move’s long-term impact.
Take Stock of Your Post-Divorce Financial Situation
Once the divorce is finalized, you want to fully understand your current financial standing. Many people find themselves unaware of their financial situation after a divorce. As Edwards mentions, one common scenario is when one partner who handled finances during the marriage leaves the other partner uninformed.
Start by listing all your current assets, liabilities, income sources, and expenses. This step will give you a clear picture of what you have and what you need to manage. Edwards suggests a thorough inventory, including any real estate, insurance policies, and investments that are now in your name as a result of the divorce.
Prioritize Liquid Assets
Having liquid assets is vital. As Edwards recounts from his experience, some clients who left their marriage with substantial wealth but most of it was tied up in non-liquid assets like real estate. This made it challenging to cover everyday expenses. Convert unnecessary or under-performing assets into cash to ensure you have enough liquidity to manage your daily needs and unforeseen expenses.
Seek Professional Advice
Post-divorce finances can be complex. Engaging a trusted financial advisor can make a significant difference. Edwards highlights the importance of working with a professional who can see the big picture and help you make informed decisions. Look for advisors who specialize in post-divorce financial planning and have excellent reviews.
Build a Solid Financial Plan
Work with your advisor to develop a comprehensive financial plan. This is key to long-term stability. Edwards emphasizes the importance of a “base case plan,” which outlines your current situation and projects your financial future. This plan should cover:
Budgeting: Create a realistic budget that reflects your new lifestyle and ensures you live within your means.
Emergency Fund: Establish an emergency fund that can cover 3-6 months of living expenses.
Retirement Planning: Ensure your retirement accounts are aligned with your new financial goals. Regularly review and adjust your contributions.
Invest Wisely
With a clear understanding of your financial situation and a solid plan, you can start investing to grow your wealth. Edwards advises aligning your investment strategy with your financial goals and risk tolerance. Diversify your portfolio to manage risk and maximize returns. Consider working with an advisor to identify the best investment opportunities for your situation.
Continuous Monitoring and Adjustment
Your financial plan is not a one-time task. Regularly review and adjust your plan to reflect changes in your life and financial goals. Use technology to keep your financial data updated and accessible, enabling you to make timely decisions.
Contact Vacca Family Law Group
Divorce is a difficult transition, but with the right strategies, you can secure and grow your wealth after your divorce. At Vacca Family Law Group, we recognize the intricacies of post-divorce life and are here to help you achieve a smoother, more amicable divorce. This allows you to focus on building the best life possible.
Whether you’re currently facing a divorce or preparing for the possibility of getting one, staying informed and proactive can make all the difference. Our team of Collaborative Divorce attorneys and Mediators offer personalized guidance and help you make well-informed decisions, no matter where you are in your journey.
Ready to take control of your financial future? Contact us online or call (646) 798-4603 to schedule your free introductory call. We’re here to help you build the best life possible on the other side of your marriage.
Vacca Family Law Group is located at One Grand Central Place, 60 E. 42nd St., Suite 700, New York, NY 10165.
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