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Financial Planning For High Networth Individuals

Financial Planning For High Networth Individuals – Each financial advisor and wealth manager will provide you with a financial plan based on the information you bring to them.

So, on the surface, all financial plans seem to involve classification. The surprising truth is a little different. Almost all financial advisors – especially those from large investment companies with branches all over the country like fast food franchises – will give you the same plan that they offer to everyone else.

Financial Planning For High Networth Individuals

Financial Planning For High Networth Individuals

The insights you’ll find in our published books combine a variety of wealth management tools with financial planning to provide guidance for your future security with financial strategies. complex, so that your human and financial capital can flourish.

The 8 Foundational Components Of Financial Plans

Clients often share with us how the knowledge gained from this book has helped them break down industry stereotypes and give them clarity while providing insight and guidance in making financial decisions. so big.

Almost all offer an equal split between equity and bonds. Almost everyone is committed to reform. Almost everyone talks about asset allocation based on your risk tolerance.

If you want a personalized plan that gives you the security and peace of mind you need to achieve your financial, lifestyle and ambition goals, there are eight essential elements, four of which are fundamental. All other details follow.

“I want to retire peacefully” is not a specific or personal goal. It’s not “I want to get x% growth every year.”

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Personal goals are life goals. What do you want in life? What do you hope to accomplish before, during, and after retirement? How do you want to serve your money in the next 20, 30, 40 years?

These include purchases you want to make, homes you want to live in, travel, inheritances and charitable giving. It also includes your daily lifestyle, which determines your monthly requirements. Especially in retirement, this question is important.

Once you’ve clarified what you really want to achieve in terms of lifestyle, you can then build the rest of your financial plan. Through this approach, you can create a plan to ensure as much as possible that you achieve these privacy goals.

Financial Planning For High Networth Individuals

See the reviews here? If you achieve everything you want in life related to money and lifestyle, your plan will work. Investment success is there to serve your lifestyle, not to serve itself.

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Regular financial planners look at your assets and use certain models to predict your annual income based on your financial plan.

The problem with this is that if their project doesn’t follow the model they are based on, it doesn’t matter. But that’s what all financial planners do, often without realizing it.

Some models use historical data from almost 20 years ago. Well, it’s not even about the dot-com crash. Others go back 30 years. Black Monday has not been included since 1987.

To get really reliable historical data for your plan, you need to extend it before the Great Recession. The column model dates back to 1925. Now your plan will be based on data with multiple major wars, inflationary periods, presidential coups, one-day crashes. , many bear and bull markets, and more. Your financial plan can be tested against 100 years of reality.

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In the Pillar Model, your project is tested in 1000 different scenarios. These views are drawn from historical data dating back to 1925.

To understand the beauty of this approach to financial planning, you need to combine these 8 elements. Personally, they can’t do anything. Only by combining it all with a comprehensive financial planning system can you extract the value you seek – peace of mind – from financial planning.

Therefore, the stress test implements your financial goals and personal lifestyle through a model based on historical data since 1925, combining elements 1-3. If the process shows that you will achieve your life’s goals, make sure to build on that statement. Iron armor. How is the iron fist? See item number 4.

Financial Planning For High Networth Individuals

Of course not 100%. If a meteorite the size of Texas falls in the United States, your financial plans will fail.

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But your financial planning – based on historical data – can show you that you will exceed your life goals in between 75-90% of stress test situations. those. All your goals. Some of them are not. And you exceed your goals. It’s not just about meeting them.

If your plan exceeds your goals in 75-90% of these stress tests, which we call the comfort zone, you can have great confidence and peace of mind about your future. You can relax, enjoy life and know that you will be taken care of.

These first four elements of financial planning are the most important. Everything else is based on them. In fact, it’s the first four that most financial planners don’t understand or use.

The next four elements make up the second layer of your foundation. Built first, they are critical to the success of your project and to maintaining itself throughout its life.

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Why? Because every project looks good at first glance. Everyone feels confident and excited at the start of a long walk or marathon. But what happened ten years later? What happens when half of your goals are out of date and replaced by new ones that you never thought of when you first created your plan? What happens if your financial situation suddenly changes (for better or worse)?

According to many experts, asset allocation is the most important component of any investment plan. Remember the context here. the

Planning is part of your financial plan. The first four items listed above comprise the basic foundation as already mentioned.

Financial Planning For High Networth Individuals

It is based on your risk tolerance. But your risk tolerance depends on your goals and the results of your stress tests and historical data. Many advisors ask what your risk tolerance is, with zero context and nothing but your own motivations and preferences to guide you.

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Your risk tolerance – in the kind of financial planning we’re talking about – is, in fact, not yours. Your risk tolerance flows naturally from your test results and goals. If a conservative distribution allows you to achieve all of your goals, then your potential tolerance is conservative. If allowing yourself to be a bit more aggressive helps you achieve your current goals in life, then that’s your risk tolerance.

For example, we had a client come to us once whose previous manager believed he could beat the market. (Note: This is a big warning sign that you need a new advisor. For all 7 warning signs when choosing a financial advisor, click here) [Link to Ultimate Guide]

This manager opened eight accounts with various fund managers, which were set up for massive growth of 100% of their assets. There are no strings attached. Only one out of eight beat the market. And that’s unusual. [Link to Blog 1 – A Market That Works]

After running his goals and lifestyle plan through our process, this client needs 30% of his assets in savings. 100% away! With a conservative asset allocation, he gets low taxes, all his investments in one place, the peace of mind, and the confidence that matters most to him.

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Not all of your assets will go as expected. Some will do better, some won’t. But giving keeps the plan safe for 75-90% of your stress test situations. Therefore, an important part of financial planning is to regularly balance your assets to ensure a financially secure financing.

A guaranteed monthly income is the only way to achieve true peace of mind – even in retirement. Therefore, your financial plan should include a monthly amount that you can calculate as a salary.

This income should be sufficient to support the lifestyle you describe in your goals. It should also be money that keeps you within the 75-90% comfort zone we often talk about.

Financial Planning For High Networth Individuals

Again – can you see how all the elements of your financial plan work together to create the secure, focused and successful lifestyle you desire?

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Your goals, plans, finances and priorities will change. It is inevitable. No one’s plan stays the same for decades.

Therefore, if your financial plan is not updated regularly, it will be removed from your life, until finally it is completely cut off. For example, let’s say that your first financial plan allocated a large portion of your wealth to send your two grandchildren to top colleges.

But then, one grandson gets a full scholarship and the other decides on a different career path and doesn’t need the money. Now you have hundreds of thousands of dollars that you never expected. And let’s say you got divorced.

Just these two

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