Who Can You Trust ?

When Clients first come in to meet with us and after we have them tell us their complete life story (warts and all), we ask them about relationships they have with other consultants – financial, legal, and even accounting. Many of our clients have had multiple consultants, none of which knew their entire picture. This tells us they never really trusted any one person. Many of them come in to us confused about the difference between looking at investments and planning for life. It’s a mistake that could take them under. Planning for life means learning what your cash flow needs are – now and in the future. It’s having hard discussions about what might have to be cut or purchased later. It’s how you are going to prepare for unforeseen expenses when you no longer have time to “pay it back” or “save it later.” We have had these conversations with people who have had incomes that are modest and with people who have had incomes well into seven figures. No matter how wealthy, these conversations still must happen. Planning for life means dealing with risk. Risk is all the bad things that can happen to you. This can be a need for extended medical issues, but it could also be a child to whom you can never say no. It can be an aging parent. It can be a sudden death. It could be your guaranteed pension benefits going away when the company goes bankrupt. Planning for life encompasses projecting the combination of your spending needs, elements of risk you encounter, and understanding all of your resources so you don’t end up with too much life and not enough money. Planning for life means planning for your legacy. What will happen to you in your final stage of life, and then what happens to your family after you are gone? Your estate can produce dramatically different consequences to those you love, depending on how it is distributed. Unfortunately, most of us are focused on investments only – their rate of return (or lack of it.) They are unaware of the tax consequences of different types of investment vehicles, the expenses they pay and that different ways to access assets can provide different results. And no, a plan on the back of a bar napkin or a piece of paper will not do it for you. You are underserved with meetings that focus first on account performance and then, maybe, the question: “Is anything else going on with you”? You need proactive planning and you need it before you leave the workforce. You need creative solutions for planning your life. Returns are important, but they are secondary in determining your success. Without planning, performance will mean nothing.