How Planning Fits in Our Process
Planning represents the foundation of what we do as wealth managers and is the first step we take in a holistic approach to investing. By engaging in a thorough and ongoing investment planning process, we can create a template from which we can analyze your goals, model hypotheticals and assess strategies as we work to coordinate your investment posture with your vision for the future.
What Does Planning Involve?
Wealth planning starts with documenting assets (investments, insurance policies, real assets, and personal property) and cash flows (pre-tax income streams and non-tax expenses). Using your inputs, we build models and run simulations of your future cash flow and asset dynamics in our planning software, eMoney. With a suite of reporting tools, eMoney allows us to illustrate in granular detail how your cash flow, net worth, estate, and many other aspects of your finances may evolve over time. This helps stimulate a dialogue about your priorities, concerns, and how you want your future to take shape.
Translating a Baseline Plan into Actionable Insights
With a detailed baseline plan and an understanding of your vision for the future, we have a template to answer questions, model hypotheticals, and illustrate potential changes to your circumstances over time. Scenario analysis can help inform optimal approaches to estate planning, long-term care planning, and help with decision making in a variety of contexts. This is perhaps the most impactful part of the planning process, and can stimulate a dialogue with your estate, tax, and legal advisors as we coordinate holistic wealth solutions that go beyond investment management.
How Planning Benefits us as Stewards of your Capital
As we work to establish a baseline plan and undergo the process of answering your “what-ifs” through scenario modeling, we can glean a qualitative understanding of your relationship with risk and desire or need for growth. A completed wealth plan allows us to take the next step and utilize a quantitative approach to risk-assessment. Synthesizing our qualitative and quantitative insights helps us devise a comprehensive recommendation that seeks to align your investment allocation with your preferences and plans for the future.
Your Vision for the Future
We need to learn about your unique goals, how you envision your future and the legacy you would like to leave behind. Typically, we schedule an initial, high-level discussion about your priorities, however, this conversation is ongoing and spans the length of our working relationship.
Data Inputs
Of course, we also need data to build a model of your financial picture. Although non-exhaustive, the appendix to this document includes a list of information that could be relevant your plan.
Inputs to an Investment Plan
External Assets, Liabilities, and Insurance Policies
Liquid and Illiquid Assets
- Investment Accounts
- Examples: Standard brokerage accounts, IRAs, 401ks, Private Placements, ESPP, RSU’s, Employer Stock Options, Annuities, Cash-Value Life Insurance Policies, etc.
- What we need: Statements (improves accuracy of modeling and simpler to gather for you)
- Checking and Savings Accounts
- What we need: Balance, name of institution, interest rate (for savings accounts)
- Real Estate
- What we need: Description of property type, estimated value, cost basis, depreciation schedule (for investment properties, if applicable), annual property tax and maintenance expense, income (for investment properties, if applicable)
- Real Assets
- Examples: Businesses, mineral rights, natural resource assets, etc.
- What we need: Description of property, estimated value, cost basis, and associated cash flows
- Personal Property
- Examples: Automobiles, fine art, jewelry, rare collectibles, etc.
- What we need: If you would like to include any personal property in your plan, please share a brief description of property, estimated value, and cost basis
Insurance Policies
- Examples: Term life, health, long-term care, property and casualty, umbrella, business, liability, etc.
- What we need: Description of coverage, cost, and term.
Liabilities
- Real Estate Debt
- What we need: An indication of the encumbered property, type of mortgage (fixed, variable, interest only, etc.), loan balance, payment frequency and amount, interest rate (fixed or floating details), starting balance and closing date, and the term of the loan
- Other Loans
- What we need: Loan balance, payment frequency and amount, interest rate (fixed or floating details), starting balance and closing date, and the term of the loan
- Lines of Credit
- What we need: An indication of what assets are collateralized (if applicable), current balance, rate, total available credit, interest rate (fixed or floating details)
Cash Flows: Current and Anticipated
Income
- Examples: Employment income (cash comp, bonus, and equity compensation if applicable), projected or current Social Security benefits, pension, and other income streams
- What we need: For employment income, please provide a description of how it may evolve over time and your desired retirement date. For current Social Security, please provide a gross-of-tax (and Medicare) if possible, for projected benefits, please share your ssa.gov pre-tax projected benefits at age 62, 67, and 70. For all other incomes, please provide a description of the income stream and how you expect it to evolve in the future.
Expenses
- Examples: Basic living expenses, discretionary spending, education expenses, philanthropic giving, recurring large expenses (like replacing a car), and meaningful one-offs (like a roof replacement, ransom payment, etc.)
- What we need: Expenses at whatever level of detail you desire. Please indicate if you anticipate changes to certain expenses over time (for example, travel expenses will double upon retirement, college tuition will be paid from 2029 through 2033, etc.).