The following is a hypothetical financial planning scenario presented for illustrative purposes only. It should not be construed as an investment recommendation or solicitation. Please consult a financial professional to discuss your individual situation prior to making any investment decision. Past performance is not a guarantee of future results. The rates of return do not represent any actual investment and cannot be guaranteed. Any investment involves potential loss of principal.
Have you tried to take on a task to save yourself money only to figure out later that it’s better to pay the expert? You waste time when you could be paying a professional with experience. Whether it’s hiring landscaper at your home, a bookkeeper for your business, or a financial professional for your investments, your time is valuable and better spent on your area of expertise.
Let’s look at Jessica’s situation as an example.
As a small business owner, Jessica is wondering how she will ever be able to retire and who will take care of her as she ages. She doesn’t have children and doesn’t want to return to corporate America just for the healthcare and retirement plans. She needs a sound financial plan from a trusted professional who understands her needs and financial goals.
Jessica doesn’t have children and is concerned about who will take care of her in the future. She watched her mother care for her grandmother for more than a decade. Toward the end, her grandmother was put in an extended care facility that was costly for the family. Not only did her mother suffer emotionally, she was financially devastated.
Jessica decided that she needed insurance to pay for her own long-term care in her home or a care facility. She has been focused on funding that policy.
Jessica loves her work as a photographer and doesn’t intend to retire for at least another 10—15 years. Even then, she intends to freelance part-time until her health forces her to fully retire. That’s an important part of her goals that she needs to tell her financial advisor.
She has an IRA Rollover from an old employer that she has been managing herself. She often wonders if she is invested in funds that will help her reach her long-term financial goals. She met with a financial professional to weigh options of having them manage her retirement or just continue doing it herself. Ultimately, she decided to have them manage her investments.
Once Jessica understood there were tax benefits awaiting her as a small business owner that she was unaware of until she spoke to her financial professional, she decided it was time to stop self-managing and let the pros help.
In addition to funding the insurance policy, Jessica is able reap some tax benefits for contributing to an owner-only 401K. Each year she meets with her advisor to discuss her ongoing funding strategy.
Jessica’s uncle, also a photographer, mentioned a hot photography-related stock that he thought was poised for growth. After discussing with her financial professional, she decided it wasn’t a good fit for her portfolio. It was sound advice. The following year the stock took massive losses after the company failed to get patent approval on a key piece of technology and a competitor copied the technology.
She was pleased she avoided the investment but was concerned about a weaker economy and what the political climate means for the economy. She considered cashing out her investments but thought better of it. Her financial advisor reminded her of the long-term nature of her portfolio and they reviewed her risk number to make sure she was comfortable with the possible losses she could sustain in the next six months if the market turned for the worse. She stayed the course and the markets recovered.
Jessica meets with her financial advisor annually and is able to call or email as often as she needs. She trusts they are the experts which allows her to focus on building her photography business knowing her portfolio is positioned for positive results.
Shanna Tingom uses clear guidance from financial planning and investment management strategies to help you, as her client, achieve your financial goals. The principles she utilizes have been studied by Vanguard with their Advisor’s Alpha research and have been demonstrated to be an effective method to save clients time while adding value.
