Planning and managing your financial future is not rocket science, yet it is as complicated and important. It starts with listening and understanding all of your and your family's goals. DWM planning is designed to help you wisely manage your finances so you can reach your goals and dreams, while negotiating the barriers and changes that will inevitably arise in every stage of life. It’s an area where we can add real value to your financial life:
DWM in action:
Jim and Sue’s first question to DWM was “when can Jim quit his job?” Jim was 48, an executive for a large company who worked 50-60 hour weeks, traveled a great deal and was quite successful financially. Jim liked to work, but had grown tired of the pace and constant travel of his current job. His wife Sue worked in a small family business. In addition, in 2008, before they were DWM clients, they had lost roughly 35% of their retirement funds in the financial crisis. That really bothered them and, when we first met them, almost all of their retirement funds were sitting in cash.
We showed them how their money sitting in cash was losing purchasing power each year due to inflation and this was causing their date of financial independence to be further in the future than it needed to be. We reviewed the need to stay fully invested in an appropriate asset allocation meeting their risk tolerance. We also showed them that the most controllable variable in financial planning is the amount of money spent each month. We helped them identify their expenses as needs, wants and wishes. With no changes, it appeared that Jim and Sue would not reach financial independence until age 65 and therefore had another 17 years with Jim in his current job. We recommended a scenario whereby they would become fully invested in a conservative allocation and modify their current and proposed spending; eliminating certain wishes that really weren’t that important to them. With these changes, they reduced their date of financial independence by 8 years. As we monitor the plan, we see that Jim and Sue should be financially independent at age 57, able to retire from the big company and pursue their passions for as many years thereafter as they want.
Reaching financial independence eight years earlier. Priceless.
There are many metrics that impact timing on financial independence and overall cash flow management via financial planning. These include assets, annual additions to your investment accounts, your proposed date of financial independence, your expected “retirement income”, inflation, investment returns, tax rates, goals (including spending needs, wants and wishes), and expected longevity. After a thorough review and understanding of your unique metrics, we develop scenarios and choices for you for the future to build our your financial plan. Once we agree on said plan, it is implemented and then subsequently monitored and revised as appropriate over the coming decades.