Wealth – accumulating it is something every person strives for. The thing about wealth is, you cannot, and shouldn’t, work for it constantly. You need to let it work for you too… And that is precisely where the issue lies, for not many people realise this. There is a lot more to income than just creating and consuming it. It needs to be thought out. It needs to be worked on in such a manner, that it secures your present as well as your future.

When you’re looking at your and family’s welfare as a whole, wealth creation is actually just one part of it, and not the only part. Family Welfare can be systematically broken down into four parts –

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  1

  Creation of Income

  The primary focus. This is what every person works for. As a breadwinner, there are a number of reasons a person focuses majorly on income generation, like -

  • Supporting the family, the livelihood
  • Improving and maintaining a certain standard of living
  • Wanting to have a certain social status
• 

  2

  Consumption of Income

  This involves expending the income on necessities and other arenas. One area that must be given more thought when it comes to deciding what to spend on. Consumption should be judicious. More on necessities than wants and other luxuries.

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  3

  Continuation of Income

  The most important, yet the most overlooked aspect of family welfare. Continuation of income is about planning and organising our wealth for the future. This is what prepares you for contingencies. This takes care of the family in case of foreseen/unforeseen circumstances where you would have limited or no income – for eg. Retirement, medical emergencies, etc.

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  4

  Conservation of Income

  This might be listed last but never should be the last step. Usually, people tend to conserve what is left after creation and consumption. When in fact, a portion of your income should always we conserved first, based on your future goals, and then what is left should be consumed well.

An effective wealth management involves all four of these. Often, people tend to exhaust their funds in the first two C’s. Even if some of them go further, they tend to skip Continuation. When you’re investing, you must take care of continuation as well. It is an important factor to help maintain your future standard of living as well. This is the part where the money you earned works for you. And for this very purpose, an effective investment plan is necessary.