What is a critical first step in establishing a wealth preservation strategy?

Identifying and assessing current financial assets is a critical first step in establishing a wealth preservation strategy because it provides a comprehensive overview of an individual’s financial situation. This process allows individuals to understand what assets they currently possess, their values, and how those assets fit into their overall financial goals. By assessing these financial assets, one can determine how best to protect and manage them against potential risks such as market volatility, inflation, or unforeseen expenses.

Understanding your current assets also informs decisions on the allocation of resources, planning for future needs, and finding opportunities for asset growth or preservation. Without this foundational understanding, any wealth preservation strategy may lack direction and fail to address important areas.

In contrast, while creating a detailed budget and signing up for retirement plans are important elements of financial management, they are secondary to the need for a thorough understanding of existing assets. Investing heavily in stocks can be risky without first knowing the complete financial landscape and ensuring that such investments align with preservation goals.