Financial Organization – Part 2

Winning the Game – Developing a Financial Strategy

In our last blog, we talked about emptying and organizing the financial “junk drawer” into a working model. Once that is done, we have the beginnings of helping people move from where they are to where they want to be in life. It’s the starting point; the baseline. When you go to the doctor you get an EKG which becomes the base line for all changes to medications and treatment protocol. Improvement can be measured from that baseline which makes it a very scientific approach. In that same way, we create a financial baseline from which changes, protocols and improvements can be determined.
Our approach is to help our clients see a picture of their current financial world through what we refer to as the game board. Try to imagine playing chess where you have all the pieces but don’t have the board. How do you plan your strategies for winning without being able to see the whole picture? We have fun helping people make smart decisions so they can move around the financial game board without being “checkmated.”

Once we establish the game board and recreate our client’s present position, we can help them see what challenges or problems they have. As with the medical example cited above, there is a very scientific approach to our work. The game board structures a client’s assets and decisions into 3 areas:

Protection: We begin by evaluating all areas of protection because it is vital to shelter assets, income, and life from unpredictable events and eroding factors. This means evaluating the important details regarding your vehicle and property insurance; liability protection; disability and medical insurance; government benefits; possible enhancements your attorney could make to your wills and trusts; and evaluating your life insurance. The objective is to maximize your protection at a minimum cost.

Savings: Next we concentrate on the savings area (rather than your investment portfolio) because you should first build a solid foundation. We recommend between 15%-20% of a person’s gross earnings be saved. Once that savings goal has been met, we want to be sure that they build up at least 50% of their adjusted gross income in liquid savings. It is critical that you first have enough liquid savings to enable to you to cover emergencies and take advantage of wealth-building opportunities. The objective is to increase your rate of return, reduce risk, increase liquidity, and minimize your current and future taxes.

By coordinating and integrating your protection and savings first, your overall plan is better positioned to work under a variety of circumstances. Now we can concentrate on:

Growth: When you have accomplished your goals for liquid savings, you are ready to change your focus to your investments, which may include stocks, bonds, mutual funds, real estate, collectibles, and your business. We evaluate your current rate of return, risk, and taxes with the goal of coordinating and integrating the growth component with your protection and savings, reducing risk, minimizing taxes, and increasing future income to allow you to be financially independent.

Our philosophy is that by creating a proper lifetime strategy, clients can assure themselves of the best result and that their wealth is going to be better protected from eroding factors by having their money in motion. We utilize strategies such as the financial game board to allow clients to visualize the overall picture and move money from one part of their model to the next. The movement of money helps make their money work harder as opposed to leaving their assets in one place.

So when it comes to the game of wealth management, you really need to have a board in order to know the best way to proceed. Wondering what your financial game board looks like? Why don’t you give us a call and let us help you see the picture and develop your winning strategy.