Clemson and Alabama know it. The Super Bowl contenders-Patriots, Steelers, Falcons and Packers- know it. There are many factors and lots of hard work that contribute to success. You need consistent, effective blocking and tackling. You need excellent offense, defense and special teams. You need a super game plan. And, you need to be able to make modifications as conditions change. It’s the same thing with achieving your long-term financial goals. This “elephant” needs to be eaten in “smaller bites.” Wealth management requires attention to the key building blocks, a disciplined process and likely an accountability buddy and coach to be successful.
Here are the main building blocks to achieving your long-term financial goals:
- Goals– establishing the financial and personal goals for your lifetime and your legacy; separate them into needs, wants and wishes.
- Financial Plan– developing the road map for your future; showing how you get from point A to point B and accomplish all of your goals.
- Investments– identifying your investment objectives, constraints, risk tolerance, asset allocation, and rebalancing and other procedures to protect and grow your assets.
- Income Taxes– determining strategies to minimize your income taxes and make sure your investments and financial planning strategies are tax efficient.
- Insurance/Risk Management- making sure your coverage is appropriate (like Goldilocks, “not too much and not too little”) and the premiums are as low as possible.
- Estate Planning- ensuring that your estate will be distributed in the manner you wish, that you pay the least amount of estate tax and that estate administration is inexpensive and hassle-free.
At DWM, we review these key areas with new clients using our DWM “Boot Camp” process. This is a series of four to six meetings, typically over a 4-12 week period. For you ex-athletes, our clients tell us these meetings are like “two a day” practices: “It feels great when they are over.”
Next is monitoring. Again, you need a process. In today’s world, “set it and forget it” just doesn’t work.
On a daily basis, you need to track activity in your investment accounts. You need to keep up to date with the news, the investment environment and the financial information that could be impacting you and your goals. At least monthly, you need to review investment performance by asset class and compare to benchmarks. On a quarterly basis, you need to review your investment portfolio for performance and asset allocation.
You should review your financial and personal goals at least a couple of times per year and update your financial plan. You should review your prior year income tax returns in May, determine what new strategies might apply for the current year and obtain a current year projection. You should review and update this tax projection in the fall. You should carefully examine your insurance premium statements when received and, at least every couple of years, go out for quote again. You should review the key points of your estate plan every year, including executors, trustees and agents and their successors. Based on updated current assets, you need to review if your estate is taxable and the distributions and their timing based on your current plan.
Monitoring is a big job. And, then add to that some of the key life events for you and your family (that may also require changes to your game plan) including:
- Birth of a child or grandchild
- Educational matters
- Child/grandchild reaches majority
- Job and career changes
- Major illnesses
- Onset of physical incapacity in old age
- Death of a spouse, parent, sibling or other significant person
Is it any surprise that with all you need to do to achieve financial success and manage your wealth that you might consider an accountability buddy and coach, perhaps someone like DWM?
At DWM, we use a proprietary process to help you develop, monitor and modify your financial plan and manage your wealth over time. Our Boot Camp is a great way to develop your plan. Our daily, weekly, bi-monthly, and monthly processes which we refer to as “Increasing Wealth by Adding Value” are designed to monitor your plan and provide suggestions to improve your plan. Personal meetings with you are times to review both progress and status of your building blocks and changes (including key life events) so we can help you keep your plan current. And, most importantly, as your independent friend and coach, we are accountable to you and help you be accountable to yourself and your family in achieving your long-term goals. When you accomplish all of that, it’s like you (and we) have won the Super Bowl.