First and obvious, losing a parent, especially unexpectedly is tough, but it can also carry many complications, family conflict, etc.
Career wise, Paul works for a private equity backed healthcare startup and Simone’s a terrific middle school teacher. Before contacting us, they admitted that while they eventually planned on reaching out, they collectively agreed they were in no rush given their less than complex current lifestyle (no kids, nothing overly financially complicated in their lives).
But as life would have it, financial complication suddenly found them and as the estate money began to flow in, they began stockpiling cash in a high-yield savings account (certainly not the worst thing in the world).
Paul and Simone made a great decision and got in touch with us early. Here’s how we got started.
Their needs & wants:
They explained while stockpiling the estate cash, they experienced FOMO of not investing the money. Like so many 30-year-old families, of course they don’t know exactly what they want their future to look like, but they do know they want options and flexibility and that investing some of this windfall could help fuel that.
They also wanted to establish an emergency fund, although had no idea how much they should set aside?
Paul and Simone were in a great 3 bedroom, 2 bath house, terrific neighborhood, good town.
However, they felt that the house could use some updating and improvements.
They also wanted to put a vacation (a nice vacation) on the calendar, they had their eyes set on Aruba.
How we set them up:
We established and put in place a financial plan.
Beginning with our recommendation that they have six months of living expenses in a high-yield savings account and this would be left alone as their emergency fund. Simone kept great records and shared that their monthly expenditures were $7,500/mo., equating to a $45,000 emergency fund floor.
Next, we wanted to fund the home improvements, which they estimated in the neighborhood of $25,000. The trip to Aruba was also factored in and we set aside $6,000. We established a separate HYSA as a sinking fund and transferred over $31,000.
Third, and something we like to do with many clients, we applied for a Home Equity Line of Credit (“HELOC”). If you’re a client of ours or familiar with our message you know that we believe that “access to cash is king.” These guys established substantial equity in their home as they purchased it in a bustling Charlotte neighborhood just prior to the COVID pandemic. The goal is to never need it, but it’s available in the event.
Fourth, in their quest for future financial flexibility, we opened a joint investment account and invested the remainder of their inheritance into a low-cost diversified portfolio. We explained our investment theology and the difference between risk and volatility. More importantly, Paul & Simone committed to systematically adding to this investment account through dollar-cost-averaging (investing a consistent fixed dollar amount on a regular basis, regardless of the share price).
Finally, we made sure that all the other moving pieces (retirement plan contributions, investment allocations, beneficiaries, group benefits, estate planning documents, life insurance needs, disability insurance needs, etc.…) were in place and set up to be properly funded in the future.
Bottom line: Our goal is to provide our clients clarity about their financial situation today and confidence in a strong fun-filled future.
Is Paul and Simone’s plan perfect, exact and never to be revisited? Of course not.
The magic is not in simply having a financial plan, but establishing a plan and ongoing relationship with your financial planner to meet and make course corrections to the plan as needed—As evident here, “life happens.”
If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers, Nic
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss.
Paul (30) inherited money after his mother unexpectedly passed away about a year ago. His wife, Simone (33), suggested finding a financial planner to help with the windfall.
First and obvious, losing a parent, especially unexpectedly is tough, but it can also carry many complications, family conflict, etc.
Career wise, Paul works for a private equity backed healthcare startup and Simone’s a terrific middle school teacher. Before contacting us, they admitted that while they eventually planned on reaching out, they collectively agreed they were in no rush given their less than complex current lifestyle (no kids, nothing overly financially complicated in their lives).
But as life would have it, financial complication suddenly found them and as the estate money began to flow in, they began stockpiling cash in a high-yield savings account (certainly not the worst thing in the world).
Paul and Simone made a great decision and got in touch with us early. Here’s how we got started.
Their needs & wants:
They explained while stockpiling the estate cash, they experienced FOMO of not investing the money. Like so many 30-year-old families, of course they don’t know exactly what they want their future to look like, but they do know they want options and flexibility and that investing some of this windfall could help fuel that.
They also wanted to establish an emergency fund, although had no idea how much they should set aside?
Paul and Simone were in a great 3 bedroom, 2 bath house, terrific neighborhood, good town.
However, they felt that the house could use some updating and improvements.
They also wanted to put a vacation (a nice vacation) on the calendar, they had their eyes set on Aruba.
How we set them up:
We established and put in place a financial plan.
Beginning with our recommendation that they have six months of living expenses in a high-yield savings account and this would be left alone as their emergency fund. Simone kept great records and shared that their monthly expenditures were $7,500/mo., equating to a $45,000 emergency fund floor.
Next, we wanted to fund the home improvements, which they estimated in the neighborhood of $25,000. The trip to Aruba was also factored in and we set aside $6,000. We established a separate HYSA as a sinking fund and transferred over $31,000.
Third, and something we like to do with many clients, we applied for a Home Equity Line of Credit (“HELOC”). If you’re a client of ours or familiar with our message you know that we believe that “access to cash is king.” These guys established substantial equity in their home as they purchased it in a bustling Charlotte neighborhood just prior to the COVID pandemic. The goal is to never need it, but it’s available in the event.
Fourth, in their quest for future financial flexibility, we opened a joint investment account and invested the remainder of their inheritance into a low-cost diversified portfolio. We explained our investment theology and the difference between risk and volatility. More importantly, Paul & Simone committed to systematically adding to this investment account through dollar-cost-averaging (investing a consistent fixed dollar amount on a regular basis, regardless of the share price).
Finally, we made sure that all the other moving pieces (retirement plan contributions, investment allocations, beneficiaries, group benefits, estate planning documents, life insurance needs, disability insurance needs, etc.…) were in place and set up to be properly funded in the future.
Bottom line: Our goal is to provide our clients clarity about their financial situation today and confidence in a strong fun-filled future.
Is Paul and Simone’s plan perfect, exact and never to be revisited? Of course not.
The magic is not in simply having a financial plan, but establishing a plan and ongoing relationship with your financial planner to meet and make course corrections to the plan as needed—As evident here, “life happens.”
If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers, Nic
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss.
