People often believe that investment management is the same as financial planning.
But financial planning is much broader, encompassing far more than your investments. Planning involves decisions about budgeting and spending, long-term goals, appropriate insurance, Social Security strategies, tax efficiencies, asset allocation and withdrawals, the lifestyle you want before and after retirement, and, ultimately, your lasting legacy.
Comprehensive planning also involves crisis prevention and management. Life happens. There are surprises and unexpected events that cause us to revisit our intentions. That’s normal, and something everyone should anticipate. The process of formulating, monitoring and taking action continues throughout our lives.
A study by Morningstar found that an advisor who partners with clients on planning and decision-making, can add, on average, the equivalent of a 1.82% annual arithmetic return through five specific components:
● Developing optimal withdrawal strategies
● Creating tax-efficient asset investment and withdrawal plans
● Coordinating various income sources under one umbrella, and planning for best usage and timing of each
● Evaluating the timing and usage of insurance vehicles
● Investing assets based upon future spending needs and liabilities
Not surprisingly, the Morningstar study found that making smarter financial decisions leads to better outcomes. By working with Better Money Decisions, you have access to our technical expertise, wisdom, experience and deep understanding of the financial markets, insurance industry and tax consequences of various strategies.
Your available resources are the starting point.
To have any chance of achieving your life and retirement goals, you need financial resources. The resources may take many forms, including savings, investment accounts, an inheritance, a pension, income from an ongoing business or employment or Social Security.
This is the baseline. If you are not quite there, we can help set a plan in motion to gather the resources you will need.
Getting a clear picture of your resources is the first step. However, this information isn’t very meaningful without understanding how the various pieces fit together as part of your lifetime income stream, or as building blocks for a lasting legacy.
What level of spending is sustainable? What kind of insurance do you need? When should you begin taking Social Security? How can you make portfolio withdrawals to manage tax consequences? What investment mix has the best probability of yielding the return you need, while mitigating downside risk? Are you able to leave something to your heirs or to nonprofit groups that you support? Is your estate planning complete?
These are just some of the questions that a comprehensive plan will address. Our Certified Financial Planners (CFPs) use detailed planning software to compile the data to create a plan that reflects your personal situation. It sets the stage for the next level of financial decision-making.
The plan gives you insight into what steps lead toward achieving your financial goals.
However, the “how” is often tricky. It often means balancing needs vs. wants. Perhaps the reality of your situation means you can’t offer family members the help or the inheritance you had envisioned. Perhaps it means scaling back your own lifestyle, to meet other obligations. In some cases, it means difficult conversations with family members, including adult children.
This is the crux of the decision-making process, and one that isn’t addressed by stock brokers at big national firms, who typically have a narrow focus on your investment portfolio. But it’s at this stage where plans often go awry, unless your advisor walks with you through the potential pitfalls. Without processing this step, no amount of investment management skill will sustain the lifestyle you want. We work with clients in creating a clear path to the right decisions.
Here’s where the rubber meets the road. It’s time to implement that investment portfolio that matches your unique risk-and-return profile; one that is based on the planning and decision making of the previous steps.
Maybe you cancel insurance policies you no longer need, or purchase policies that do make sense, at this phase of your life. Perhaps you can’t retire as soon as you’d hoped, so you develop the right mindset to work for a few more years. Or your existing assets may need a better strategy.
Our investment philosophy is based on the research of Nobel Prize winning economists going back to the 50s. We don’t bet on the market or recommend hot stocks but we do design an investment portfolio that is right for you. We work with a team of Chartered Financial Analysts and experienced market researchers to tailor a portfolio that matches your income needs, risk tolerance, time horizon and other unique parameters.
Getting your financial life streamlined and organized sets the stage for the decision-making process that continues throughout your life.
You may have heard the phrase “living document” applied to any form or report that’s continually edited and updated. Your financial plan is such a document. In previous decades, advisors often delivered a leather-bound book – sometimes even embossed with a client’s name! This suggests permanence, but that was often misleading.
Unfortunately, these books were put on a shelf and forgotten. Life situations are never permanent. Things change, often for the better, but not always. Sometimes your life has evolved to a new stage, and goals that you felt strongly about three years ago no longer interest you, or don’t make sense anymore. Nothing wrong with that.
We work closely with our clients as their lives change, and plans change. We’ll help you sort through the ongoing emotional and financial decisions that we all face.
You want to enjoy what you’ve earned. That may mean volunteering, traveling or spending more time with your grandchildren. It may mean starting a new post-retirement career.
Everyone’s ideal lifestyle is different, and the planning to bring it to reality varies in every case. In addition to planning for the retirement you’ve dreamed of, it’s crucial to consider the later years. How will you cover costs of long-term care or other health-care needs without being a burden to your family?
The top of the planning pyramid is a goal, but it takes ongoing work to help you get there, and stay there. We help people from all walks of life achieve that goal.
We work with clients to navigate to the top of the pyramid and to stay there. It’s more than managing assets; it’s about helping you lead the life you want.
Every year, investment research firm Dalbar does a study on average investor performance, and every year the results are the same: The average investor underperforms a basic stock index. That’s not because of fees and expenses, but because of poor decisions about stock picking, market timing and performance chasing. We help our clients avoid these traps.
Also, a recent study by Financial Finesse found that those who regularly get assistance from a financial planner experience a much higher degree of positive behavioral change than those that engage solely with online financial tools:
● 80% who work with a planner have a handle on their cash flow, compared to 66% of online-only users
● 72% have an emergency fund, compared to 50% of online-only users
● 98% contribute to their retirement plan, compared to 89% of online-only users
● 48% are on track for retirement, compared to 21% of online-only users
● 64% are confident in their investment strategy, compared to 42% of online-only users
You, too, can have a better outcome than the average American.
By guiding you to make better money decisions along the way, the pinnacle is not only within reach but sustainable.
Better Money Decisions, LLC, may transact business only in states in which it is registered, or in which it is excluded or exempted from registration.
Better Money Decisions, LLC, is currently registered in the State of New Mexico.