Before we can do anything we, as planners, need to get some basic information about your financial condition and your aspirations. Typically this means filling out our Inquiry, which will give us a sense for your income, assets, liabilities and, most importantly, what you want to achieve. There is additional data gathering throughout Base Camp, but we like to do as much up front as possible. Ideally, inventory is complete before our first meeting, but often it is combined with the first couple of meetings.
Financial Planning at 50,000 Feet
If we need clarification on any of the discovery completed in Inventory, we will clear up confusion during Financial Planning at 50,000 Feet. This is where we try to put some meat on the bones of your goals, asking how much things cost, when you hope they will realize, etc. These conversations will eventually provide us with a sense of your condition with respect to your aspirations and we can begin to give you a cursory prognosis. Financial Planning at 50,000 Feet is about setting reasonable expectations. We've written a lot of plans and draw upon that experience to give you a sense for how easy/difficult your road ahead may be. Furthermore, we take the time to look at strengths, weaknesses, opportunities and threats (SWOT analysis).
The Personal Finance Compass
A cornerstone of Base Camp is understanding the movement of money in and out of your life, information cultivated during The Personal Finance Compass. We use a complex tool fueled by your monthly expenditures, income, taxes and savings data to generate an accurate estimate of your annual cash flow. This tells us a lot, not the least of which is how much savings your are accomplishing and how much room you have to save. Great planning translates long term goals from distant fantasies into a knowable, daily actions. Unto that vision, this is step one.
One of our more involved stages, Scout Investments covers investment education, risk tolerance testing, investment planning, portfolio selection and investment organization. It is pretty common for people to arrive with a lot of small accounts that have accumulated over time. We want consolidate like-accounts and reorient assets that aren't working hard enough. This is also a time to explore opportunities like retirement plans, options, restricted stock units and defined benefits plans, incorporating each respective element into a single vision for your investments.
Weighing Real Estate
From first-time home buying to a 1031 exchange of an investment property, Weighing Real Estate covers a wide spectrum of possibilities. We customize this content to the real estate choices you are facing. Thus, questions we may answer are wide-ranging. How much can I afford to put towards a remodel? What is a healthy mortgage given our income? Which of these investment properties will have a higher internal rate of return? We will work with you to cultivate great data and to explain how your real estate decisions affect your plan.
In this stage we take a step back to evaluate the various risks each respective client faces. Some of those risks will be affordably transferrable with an insurance product, but others may require alternative mitigation techniques. As a part of this risk analysis, we will read any policy you would like evaluated to ensure proper levels of coverage and, hopefully, to trim unnecessary premiums. These decisions about risk will be seamlessly integrated into the other stages of Base Camp.
Accurately forecasting how you will spend your resources and time in retirement is a difficult task, especially for young and middle-age professionals. We understand the difficulty of projecting your future self at any age, but we help by asking lots of leading questions about lifestyle, health and healthcare, hopes for travel, long-term care, and lots more. With this information we eventually build a relatively conservative model that we stress-test during Base Camp and update in the years to come as your vision for the future changes.
The Tax Trail
This stage of Base Camp is highly customized to the individual or family. Content can range from projecting the consequences of the sale of a large asset to estimating the tax burden of an estate. Often we use The Tax Trail to talk through some element of a complex compensation package, such as a grant of stock options.
Creating an Education Cache
The challenge of funding college for the next generation is becoming increasingly difficult as we see costs increasing for post-secondary education. Being planful is ever the more critical. We will help you estimate what your education goals will cost, and coach you through the mechanisms that make savings most efficient. If you have a child or grandchild in high school, this stage can also be an opportunity to explain the financial aspects of their collegiate aspirations.
Post-Destination - Estate Planning
The term "Estate Planning" can be a bit daunting and nebulous. We see a lot of people who assume they do not have a taxable estate. In Oregon, your estate becomes taxable after $1,000,000. So, when factoring primary homes and retirement accounts, many people face estate tax issues without knowing it. In this stage we cover the basic elements of estate planning, wills, trusts and advanced directives. Moreover, if you have a complex estate plan that involves charitable giving, blended family issues or a closely held business, etc. we can help you find the right strategy to minimize end of life costs. We are not estate planning attorneys, but we frequently work in close partnership with a legal team to build a plan tailored to you.
The Business Plan Partner
Much like The Tax Trail, this stage is customized for the client. We will look at cash flows for a business or profit and loss statements and help business owners deal with a challenge they are facing. Often, we utilize our knowledge of retirement plans to help business owners find a solution that works both for their business and employees, but also their personal finances.
Having completed the work within the other stages, in Final Checks we show you a working model of the future and results of our stress-testing. During our session we allow clients to alter various factors of the model live, allowing them to see the individual impact of their various goals upon their overall trajectory. Our goal here is to have the client leave knowing which financial decisions are truly vital to their long-term success and which are less so. Likewise, if we need to alter goals, making them more ambitious or more conservative, this session will reveal any final, necessary edits.
Leaving Base Camp
Leaving Base Camp is about summarizing and celebrating the work we've done in the prior weeks and months together. We will write up a detailed summary of your plan (typically 8-10 pages) and attach the details of a final model (another 40-50 pages). If there is any work outstanding, we will summarize what the client needs to do. Likewise, the outcomes of all of our sessions will be addressed for future reference.