Photo: Flickr user Jeff Belmonte.

The term "wealth management" often refers to something very specific: financial guidance for the wealthy, usually via services ranging from investment management to accounting and tax services to legal advice and estate planning. Visit Merrill Lynch's website, for example, and you'll read that its Global Wealth & Investment Management service "provides comprehensive wealth management to affluent and high-net-worth clients."

Yet wealth management shouldn't be considered so exclusive, because all of us, rich and poor alike, need wealth management. In fact, those of use who aren't rich need to manage our money most carefully, given that we don't have millions to spare.

You don't have to be a millionaire to manage your wealth effectively.

Do it yourself
Fortunately, much of the wealth management most of us need doesn't require a financial services company. You can tend to a lot of it on your own. Here are some ways to manage your own wealth:

  • Be sure to have an emergency fund, filled with sufficient accessible funds to keep you afloat for three to 12 months should you lose a job, face costly health issues, or encounter any other financial disaster. Consider socking away even more if you think it would take you a long time to land a new job. Don't keep this money in the stock market, as it could drop sharply at any time. Stocks are for long-term investing. Instead, consider short-term CDs and savings accounts.
  • Have a thorough retirement plan. Read up on the topic and determine how much money you'll need saved by retirement to live the kind of retirement you want, because Social Security alone won't cover it. There's no one-size-fits-all number. Some suggest aiming for 10 times your income at retirement, while others suggest $1 million (or $2 million for a couple). You might get by on considerably less, though, if you're in good health, don't plan to travel much, and have modest living expenses.
  • Be sure you're taking advantage of retirement saving tools available to you, such as employer-provided 401(k)s and individual retirement accounts. Employers often offer matching funds with 401(k) plans, so you should contribute at least enough to max out any matching funds, because that's free money. IRAs come in the traditional and Roth varieties, which offer, respectively, up-front deductions on contributions and tax-free withdrawals in retirement. You can contribute up to $5,500 to an IRA (plus a $1,000 "catch-up" contribution if you're 50 or older) for 2014 and 2015. The deadline for contributing each tax year is the tax-filing deadline, usually April 15 of the following year. The contribution limits for 401(k)s are much higher. For 2014, the limit is $17,500 plus a $5,500 catch-up contribution for those 50 and older. In 2015, it's $18,000 plus a $6,000 catch-up contribution.

Invest effectively and watch your money grow over time.

  • Be sure you're investing effectively. It's great if you're saving aggressively, but not if you're being too conservative or too risky with your investments. If you sock away $10,000 annually for 20 years, and it grows at the stock market's long-term annual average rate of about 10%, it will grow to about $630,000. But if you have a lot of money in savings accounts and bonds and you average just 5% annual growth, your total will be just $347,000. A simple broad-market index fund will match the market's performance. Adding individual stocks or managed mutual funds that could do better is optional, but for most of us, an index fund or two is sufficient. 

There's much more you can do to get all your financial ducks in a row. For example, ensure that you carry all the insurance you need, covering your life, health, home, and car. Do some estate planning, too -- in particular, draft a will, a durable power of attorney, an advance medical directive, a living will, and so on.

Remember, too, that you can always hire someone to help you with any or all of this. You may balk at the idea of spending hundreds or thousands of dollars on a financial advisor and/or tax pro, but there's a good chance they will save or earn you more than they cost. The National Association of Personal Financial Advisors can help you find local fee-only advisors.

Whether you're rich or poor, and whether you go it alone or hire a professional, be sure to tend to your own wealth management. Even if you're of modest means, whatever wealth you have is vital to you, and it should be positioned to serve you well.

A financial advisor can help you make sense of seemingly cryptic financial matters. Photo: Flickr user Jorge Franganillo.