Managing For Financial Success
The Personal Finance Pyramid
It's important to plan your financial future. This pyramid offers a simple tool for prioritizing what’s most important. By defining your goals, addressing challenges, and exploring options, we’ll work together to create a personalized strategy designed for your success.
The Personal Finance Pyramid Outlines Three Important Concepts:
- Build a sound foundation to protect you from events you cannot control
- Grow your wealth through actions you can control: saving, investing, and paying down debt
- Consider riskier opportunities to grow your wealth faster than more conservative means
As your wealth grows, there is less need for protection, and these strategies can be re-purposed into estate planning and wealth transfer strategies.
Implementing Your Plan
1. Discovery
Discovery is the first step in building a meaningful relationship with your advisor. This is where we define your goals and priorities, laying the groundwork for a personalized plan. The better we understand your financial situation, lifestyle, and aspirations, the more effective our approach will be. Like any strong relationship, this is an ongoing process, with collaboration driving better results over time.
2. Create a Plan
Once your goals are set, it’s time to create a plan to ensure you’re on the right track. For example, your plan will show whether you can retire comfortably or what adjustments may be needed. As life changes or markets shift, your goals may evolve – and we’ll be there to guide you each step of the way.
Without a plan, your goals are just a wish.
3. Investment Policy Statement (IPS)
The IPS serves as a blueprint for managing your portfolio. It outlines your target return, risk tolerance, asset allocation, tax efficiency, liquidity needs, and unique circumstances. It keeps you focused on long-term goals, even during market fluctuations.
4. Portfolio Design
Our portfolio design focuses on diversification and rebalancing to manage risk and keep you aligned with your goals. Typical portfolios include a mix of mutual funds, ETFs, stocks, and bonds, tailored to your unique needs.
To optimize performance and manage the unpredictable, my philosophy is to diversify beyond the traditional asset mix decision, considering other factors such as investment style, company size, sectoral themes, and the cost/benefit of incorporating a certain investment into the portfolio.
5. Progress Review
Progress reviews are recommended every 6 to 12 months to evaluate your portfolio’s performance relative to your goals.
During our reviews, we'll reassess the market outlook for the next period and discuss adjustments needed to keep your portfolio positioned to support your plan.