This is a long one…

The first step is to meet you. We want to get to know you and we want you to get to know us. We have had initial meetings that have lasted 3 hours where we dove into goals and dreams. After this meeting, I will create a proposal for us to work together. The proposal includes an estimate of the fee and a roadmap of how we will proceed (similar to the below post).

If you accept that offer, we will send along an agreement to sign and begin our on-boarding process. The on-boarding process will be a lot of work as we aggregate and organize your whole financial life. We utilize financial planning software to gather data and documents to begin painting a picture of your total financial situation.

The next step is to go through our initial planning process. This is generally accomplished in 8 meetings over the course of one to two years. This is purposefully intensive and requires commitment. Working with us does not initially reduce your workload – it is quite the opposite. We are generally addressing your personal financial backlog and focusing on simplifying your financial life. The structure of our planning is commonly referred to as modular planning as we separate out the key areas of financial planning and focus on specific areas:

1. Values, Goals and Expectations

This is the most important meeting – which is why we do this at the beginning. We want to identify and document what you want to accomplish. We want to make sure we are on the same page and prioritize your planning. We want to dream and set goals.

Everyone is different and we are very cognizant that the planning process should be tailored to your personality and needs.  We will talk about our expectations of each other and how we can best communicate.

2. Time Sensitive Planning

This may not apply to everyone, but we understand that a lot of people will begin working with us because of a big life event. We promise to tackle your highest priority item at the beginning of the relationship.

3. Cash Flow and Spending Analysis

We cannot do any meaningful planning without understanding your current cash flow and spending.

Most people we work with do not know what they spend on a monthly basis. They do know how much they earn. Unfortunately, we are not replacing income in retirement. Instead, we are replacing spending. To identify what retirement spending will be, we must start with your current spending. We will then utilize this information to extrapolate out what your retirement spending will be like given the goals that we discussed in our first meeting. Hopefully, while we are perusing through this data, we will also find some potential savings that won’t affect your lifestyle also (like reducing auto insurance cost or getting rid of that annual app subscription payment that you don’t actually use).

4. Savings Plan with Future Distributions in Mind

Where you save in your final few years is super important and will impact your tax situation for the rest of your life.

You are likely in the highest tax bracket that you will ever be in right now – but you may also have too much in the way of pre-tax 401(k) savings. We have to identify your future tax bracket at a few key stages in the future: Pre-Medicare, Post-Medicare and Post-Age 70 1/2. This will arm us with the knowledge of where to save and why.

After we know where to save, we can determine how effective our long-term tax planning can be. This impacts your distributions in retirement dramatically. We can then establish a current game plan for the next 20 years while your tax situation has so much opportunity.

5. Investment Strategy

Investments as the 5th meeting? But I thought you were an investment adviser! You are right, investments are important to the process but they are not the main value driver. We believe in passive index investing with active tax management.

We do not pick sectors, stocks, or trade based on technical or economic indicators. Studies have shown there is no long-term value to this approach.

However, efficient tax placement within accounts and tax-efficient asset allocation can increase portfolio performance. This may be meaningless industry jargon to you so let me put it a different way: we want to grow tax-free money faster than taxable money. It is that simple, but it is effective and valuable over the long-run.

6. Insurance Review

Insurance is critical for risk management – but it is often overprescribed as a solution to all ills. We want to analyze all your current policies and make sure you have no risk holes.

We review the following areas:

  • Health Insurance
  • Life Insurance
  • Disability Insurance
  • Long-Term Care Insurance
  • Homeowners and Auto
  • Umbrella Liability Coverage
  • Annuities

It is crucial to point out that throughout this whole process, we are only providing advice. There is no product that we sell and no commission that we receive. We also do not get kickbacks if we refer you to someone. Our goal is to provide independent advice that is in line with your goals and needs.

7. Estate Planning Review

Next in line is estate planning. A little upfront work now will reduce tons of headache later for your loved ones. We want to show you what will happen if one of you were to pass away and make sure your assets go where you wish them to go in the most efficient way possible.

Beneficiaries are the first place we start. Most of your wealth can pass to your loved ones outside the probate process. Making sure we keep a consolidated list of your accounts and their beneficiaries is a simple but effective strategy. We must defer to the estate planning attorneys on most items because we cannot create legal documents for you – but we will want to be a part of the review process to make sure everything is done correctly and in line with your values and goals.

8. Long-Term Projection

At long last! The spreadsheet with a bunch of numbers that will never fully come true. The past seven meetings will provide us with the information to develop a long-term projection of your wealth. This will be the most important meeting to making changes and decisions.

Actually, we use our financial planning softwares interactive visual planner instead of actual spreadsheets. But the spreadsheets do exist behind it all.

This projection is exactly what it is, a projection. It will not come true but it will arm us with the likelihood that your goals can be achieved. It will also give us the ability to show you what actually matters. I promise that cutting the coffee budget down isn’t a meaningful way to help your retirement.

The what-if analysis that we can do with everything in place is truly what we have been working towards this whole time. Now we can show you the likelihood of success and how specific actions and strategies can help or hurt your chances at a successful retirement. We can do worst-case scenario analysis. All the nerdy stuff that I love the most about this job.

It truly takes 8 meetings to get to this point. We are intense in our planning and we believe we need everything to be aligned for you to truly be prepared.

Ongoing Planning

We front-load the value because we believe that is important to your future. Advisors talk a lot about compounding returns. This is the reason to get everything done earlier, because the benefits of having a plan compound.

Despite the front-loaded value, we generally create long-term relationships with our clients. Life circumstances change, tax laws are enacted or you may just be presented with a new opportunity and challenge. We are there to help you through it all and always give you the highest quality advice.

The Cherry on Top

Oh, did I forget to mention we do tax preparation? And it is included in the services for no additional cost? Tax planning was scattered throughout the 8 meetings, but was never specifically addressed in a standalone meeting. That is because taxes affect EVERY aspect of financial planning and incorporating the tax effect is required to make the correct decision. Since we are so intimately involved in your financial life and your tax situation, it is quite simple for us to prepare your taxes as there will (generally) be no surprises.

We do charge for standalone business tax returns and business tax planning if you are also a small business owner. But your personal tax return is included in our calculated fee.