Reactive Proactive Financial Planning
Our financial planning process is designed to provide you with a clear path to achieve your lifetime goals. Working together, we’ll help you to develop specific, quantifiable objectives and we’ll show you what it will take to achieve success.
The financial planning process will also facilitate your understanding of how each goal fits within the overall picture and how best to prioritize your actions.
Our process can be thought of as developing answers to four simple questions:
- Where are you now?
- Where are you going?
- How are you going to get there?
- What will you do when you encounter the unexpected?
Although the questions themselves are rather straightforward, it is rare for the answers to be quite so easy. That’s why we’ll sit down with you one-on-one to develop a custom-tailored financial plan that fits your specific needs and objectives.
Once we’ve analyzed several options for achieving your goals, we’ll develop a plan that represents the “base case,” or most likely potential outcome. However, because we live in an uncertain world, the planning process doesn’t stop with a simple straight line calculation that assumes everything remains constant over time.
Instead, through the use of advanced Monte Carlo simulation, we’ll stress test your plan by running it through hundreds of different scenarios in order to obtain an understanding of how likely the plan is to succeed.
As your situation changes over time, this analysis is updated and reviewed when the probability of your plan’s success moves outside a pre-defined range.
This allows us to recommend the implementation of alternative plans to ensure that you are able to weather the storm of possible declines in the market, a loss or reduction of income, or other negative outcomes.
Our Financial Planning Process in Detail
Discovery – Where are you now?
If we don’t know our point of origin, it’s pretty difficult to set a course towards our destination.
- Develop a clear picture of your current financial position, including all assets, liabilities, and off-balance sheet items
- Cash flow and discretionary income analysis
- Career stage assessment and time horizon
Objectives & Goals – Where are you going?
We’ll work with you to develop specific, measurable, attainable, relevant, and time-sensitive (SMART) goals for your life and your finances.
- Liquidity and cash reserves
- Debt management and elimination
- Retirement planning
- College savings
- Home down payment
- Gifting and multi-generational planning
Planning & Analysis – How are you going to get there?
In order to understand the actions that need to be taken in order to achieve your unique objectives, we perform extensive analysis to link your current financial position to your future goals.
- Prioritization of debt repayment vs. savings
- Review of employer-sponsored retirement plan (e.g. 401k or 403b)
- Required savings rate
- Target rate of return on investments
- Risk management and insurance evaluation
- Tax impact analysis
Implementation & Monitoring – What will you do when you encounter the unexpected?
Unfortunately, because it’s impossible to predict exactly what the future will hold, we cannot know for certain that any plan will play out exactly as intended.
In order to best position ourselves to successfully navigate through an unexpected event, it is critical to develop contingent action plans that can be quickly and realistically implemented.
- Clearly communicate an actionable financial plan
- Develop contingency action plan should negative events take you off course