In our view, “wealth management” is the process of effectively utilizing your wealth, both financial capital and human capital, to accomplish your life goals. This does not just apply to the ultra-wealthy, since virtually everyone has financial and human resources that can benefit from expert guidance and advice. Our wealth planning and management process is designed to ensure that your wealth is utilized “on purpose,” as opposed to just letting things happen.

Starting With a Roadmap

When should I start social security? Do I have enough and the right kind of insurance? Should I sell my house or rent it? What’s the long-term impact if I sell my business? Wealth management is a complex undertaking, with many interconnected pieces spanning (typically) multiple decades. Navigating your financial journey requires a roadmap, or a plan, that will end up serving many functions. It establishes where you are heading, identifies what it will take to get there, provides a means of measuring and tracking progress, and serves as a financial model that can be used to quickly test the potential impact of major financial decisions many years down the road. Our process starts with a detailed and customized plan that will be updated and changed as your financial life unfolds. Without this, we are simply on a journey with no idea where we are going.

The Car

If you decide to work with us you will find that we use lots of analogies to communicate financial concepts. We like to think of your wealth plan as the Car and your investment portfolio as the Engine. Although the engine may contain a lot of sophisticated and cool parts, owning an engine is not the end goal. Likewise, your financial life is much more than an investment portfolio. Building a wealth plan involves creating and maintaining a detailed financial model of your life, developing saving, spending, and charitable-giving strategies, and identifying and mitigating risks that could derail your plan. All of this is designed to enable you to gain control of your wealth, optimize the way you use it, and make decisions on purpose.

The Engine

Although your financial life is not just a portfolio, it certainly needs a reasoned, well-researched, risk-managed, and adaptable portfolio to provide the engine that will power your plans. We do not believe in letting The Market dictate the success or failure of your plan, and we truly believe the disclaimer that states “past performance does not guarantee future results.” In fact, past performance doesn’t even suggest future results, and yet conventional stock and bond portfolios rely on market behavior repeating itself…and just the good periods…in the timeframe you need it to. In our thinking, this leaves too much of your financial life to chance and the whims of market behavior. Therefore, we focus on controlling risk. We tend to favor reliable and predictable outcomes versus the theoretical unlimited upside and downside of risk-agnostic portfolios. We look not only at how much risk you can tolerate, but also how much risk you actually need to take. And we constantly research new ideas to incrementally improve gains and/or lower risk. Notice that the term “risk” shows up quite often. It’s a lot easier to make forward progress when you don’t need to always play catch-up. This has led us to a “Personal Endowment” approach to portfolio design that is explained in depth [here].

In A Nutshell

The financial world is constantly changing, and most of the changes result in more complexity. Topics such as healthcare, tax rules, Long Term Care insurance and many others are not only important in their own right, but also directly influence an investment portfolio. What you do for healthcare if you retire early has a direct correlation to how hard your portfolio has to work. If you make the right decision about pension distributions or social security benefits, you will likely be less dependent on your portfolio (and market) performance in later years. Your financial and personal life are interconnected, and our process assists you in connecting the dots. Your financial journey requires a plan, a portfolio, risk identification and mitigation, and the ability to adapt to changes. This is what we mean by Wealth Management.

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