We all want to make the right decisions when it comes to our money. Therefore, at Entrust we identified three components of wealth management that can make all the difference to you, when it comes to long-term financial success. These are:
- Holistic wealth management planning for the long-term
- Values and goals-based portfolio strategy (rather that product-based)
- Periodic review meetings to assess and refine planning, as needed
There may be no better illustration of the need for these three components than the story of our clients Emily and Dan. As you are about to read, prior to being referred to us Emily and Dan did not implement a holistic wealth plan nor a value and goals-based portfolio strategy. They did not assess where they were as time passed and their assets dwindled. Instead, they consumed their portfolio, all the while assuming that because it began as a substantial sum and was invested “in good companies,” it could not diminish much.
The story of Emily and Dan:
Early in my career I was referred a couple, Emily and Dan, who reported they wanted to meet because they were “hemorrhaging money.” To them, this meant that although they inherited a substantial portfolio a couple of years before, they had already dissipated about $2 million dollars of it.
How could this be? Two things stood out when we completed our discovery meeting. First, the allocation of their inherited portfolio was not structured to generate the income they were taking, or to minimize taxes. Second, Emily and Dan had inadvertently overlooked the need to plan for their family’s financial concerns that went beyond investing. These concerns proved not only expensive but extensive as well, including things such as: promised payment of expensive college tuitions for four children, long-term care expenses for a parent, and private, unreimbursed therapist expenses for their children, to name a few.
Not surprisingly, Emily’s and Dan’s money hemorrhaging continued until we were able to 1) implement a holistic wealth plan for the long-term, 2) reallocate their portfolio based upon their values and goals, 3) conduct periodic review meetings designed to assess and refine their planning, as needed over time.
Perhaps Gloria Steinem’s wry observation crystallizes the moral of the story for all of us, as we aim to make the right decisions when it comes to our money: “Rich people plan for three generations; poor people plan for Saturday night.” Take a moment to confirm that all three wealth management components are present in your long-term planning. Better yet, schedule a conversation today to be ensure that you are on track for financial success: firstname.lastname@example.org or 610.687.3515.