Broker Check

A MULTIDISCIPLINARY APPROACH TO PLANNING

Estate Planning | Tax Strategies | Financial Planning


What Real Life Wealth Management Looks Like

| July 25, 2019
Share |
Financial Success is available to everyone but means something different to every family. At VIP Financial Matters, we are big believers that knowledge is power when it comes to financial planning, and defining your success markers should drive the plan. 
Each family must start by making a decisive move to take steps toward their goals. 
The common denominator in most financial success scenarios is ACTION.  
First off, many families view themselves as not being"eligible" for wealth management because they look at thresholds and definitions based on dollar amounts. The standard definition of wealth management means combining financial planning and specialized financial services to achieve financial goals. This includes managing personal retail banking services, estate planning, legal and tax advice, and investment management services to reach a client's goals*. The fact is that everyone should utilize wealth management tools and services. At VIP Financial Matters, we utilize the above services and our extensive experience and financial know-how to manage your individual definition of wealth.
Wealth Management Scenario A**:
Wealth Management success for this scenario was defined by looking at manageable activities and setting a plan in motion. The result? The clientis on track to retire at age 65 with $1 million set aside to fund their travel goals and income needs, and a plan for $1 million to leave to their two daughters upon their death.
Painting the Picture: 
Family Income: $185,000/ per year
After Taxes: 10,693.99/ per month
Mortgage: $1500/ per month
Other Expenses: $5000 per month
Potential Savings: $4193
This family accomplished the above goalsthrough the following steps.
  1. They envisioned the future: Focusing on savings and investments of $4000 per month from age 45 to 64. The fact is they didn't get started early. They were busy raising their daughters, living a specific type of lifestyle and setting aside money for college. At 45, they decided to take ACTION and learn what they needed to do to slow down by age 65.
  2. They got real. Up until this point, they had approximately $200,000 in their combined retirement plans(mainly 401K's). Getting real meant realizing that they could keep going as they were and possibly have $400,000 at retirement to supplement their social security OR make genuine lifestyle changes now and actually live their lifestyle and travel goals. The reality was that the family wasn't even sure how they were spending the $4000 per month that needed to go into savings! This"wake up call" impacted all members of the family and required a cut in entertainment and shopping.
  3. They defined their needs. They wanted to be able to spend more in the years 65 to 75, and then have 20 years of income to sustain a good life, but travel less. This approach to understanding goals can define genuine needs for saving money.
  4. They created an action plan. That included not just putting aside the money, but being committed to an investment strategy. This meant bi-annual meetings with their advisor and other members of the team for the first 15 years and quarterly for the last 5.
  5. They involved the family. When children understand the strategy, they are often committed to helping the family achieve their goals. This type of involvement also kicks them into understanding financial planning and wealth management for themselves.
  6. They combined Insurance and Estate Planning. When parents are worried about what they will leave for their children, they often put their own financial goals last. In this case, we were able to combine insurance and estate planning to ensure that the girls would indeed split a $1million inheritance at some point in the future. More on that in our next scenario…
While this story may not be your story, proper planning can be part of anyone's story!
Whether you have a lower, or increased level of finances to work with than the family in the above scenario, our focus on wealth management is deeply personal and remains the same. No matter how your wealth is defined or measured, we like to say – if you're making money and have goals for the future, then there's a need for planning!
*investinganswers.com definition
** Note: This scenario is a compilation of multiple different client experiences and is not meant to depict exact results or a client case study. It is a process description.
Share |