A big problem is traditional planning focuses on using individual tactics to solve individual problems to make individual decisions.
So deciding to save for college in a 529, or for retirement in your Deferred Comp, or whether or not to enter DROP… all of these decisions are made individually, without much concern about the effect on the overall flow of things.
Over time we make a multitude of these decisions and our financial strategy becomes the accidental result of these individual tactics. It hasn’t worked so well as more plans have failed than worked over the last 2-3 decades. Most of the wealth in our country is owned by a small percentage of people, partly because they use strategies rather than tactics to make decisions. They look at everything and get more value out of each decision.
The masses don’t work that way. They just do what everybody else does. What everybody else is doing is based on simple common sense ideas. Some are listed here…
Things like “my money needs to keep up with inflation”. That’s true, but there are inherent problems. Like what is inflation? So we build plans with inflation at 3%. And that’s great if it is, but it doesn’t have to be 3%. In the 80’s it was double digits, and if it isn’t 3%, then we’ll likely miss our mark. Even if it is 3%, there are other things at work. Like taxes going up. That has nothing to do with inflation, but it increases your cost of living in that year.
Another example is compounding interest, it makes sense. The longer the amount of time money sits somewhere, the steeper the curve goes. It’s a myth that these things create wealth. When we compound, there are other things at play. Expenses in other areas and changes in other decisions. Like taxes. Earnings grow on a curve, and taxes grow on a curve too. When people look at the growth, typically they ignore taxes.
Most financial advisors will show you a graph. They only show you the top where the growth is because they are in the business of managing money and that’s their focus. They don’t show the bottom half where the taxes are.  
To see if a strategy works you have to look at the whole picture.
Traditional planning is based on finding targets and goals. You’ve seen the “green line” and the “know your number” people. They identify goals, quantify those goals, and then attempt to back into those goals. It makes sense on the surface. The problem is these targets, college, and retirement, are all assumptions with MANY variables.  
An example is saving for college for a 3-year-old. You might know when they will go, but have no clue of cost. Will they get advanced degrees or go to a community college? Will they get scholarships? What will happen to the cost of college between now and then? Most of the factors used to calculate the targets are unknowable.
So statistically, the only thing we can actually be sure of is that our guesses will be wrong. The simple concept of putting away a certain amount of money, at a certain rate of return, for a certain period of time just doesn’t work.
Another problem is that people are led to believe they can hit the targets that we know will be wrong. If the target is too high, we put pressure on assets and cash flow when we realize we won’t hit the mark. If the target is lower than optimal financial performance, then it becomes a limiting factor.
Disorganization is probably the biggest part of the problem. I’m not talking about a trash bag full of receipts and papers, although that is a problem. The problem I’m referring to is that all of our financial decisions are interdependent. They affect one and other. We have to deal with the law of scarcity. We only come into contact with a finite amount of dollars in our lives.  Each time we use a dollar, it affects the other ways we could/would have used it. So the decisions we make with our Deferred Comp will affect the decision we can and will make about DROP, as well as our pension.
Most people don’t have the tools or ability to measure the macroeconomic impact of each decision, so they just make them all individually. Every decision we make has ripple effects on our money. Sometimes they are good, sometimes bad. The ripples are always present, and almost always unnoticed. We use our tools to help produce the best “ripples” by coordinating Deferred Comp, Drop, and pension decisions with the spouse’s benefits and other moving parts.
Another part of the problem we’re all aware of on some level, but often fail to combat is the Real Cost of Living. I mentioned taxes before changing the real cost of living above inflation. What about new products and services? You own things today that you didn’t 15-25 years ago like phones, tablets, computers, Internet, etc… Those things have nothing to do with inflation, yet they raise our cost of living. Wear and tear and replacement of products. Those phones and tablets don’t last long. Owning a phone really means continually buying phones from now on. It’s not just electronics. A 35-year-old will replace nearly everything they own before retirement. Cars, clothes, house, you name it.
Not to mention unexpected life events. Sickness, loss of job, more people in the house (baby or elderly). If we don’t pay attention to these things, and just set a target, even if we hit it, we will still fail.


The answer starts with net worth. Net worth is really the end result of all our life’s work. The culmination of every decision we’ve made thus far. A lot of money has slipped through our fingers, and that’s good because we took vacations, had dinners, gave to charity etc… But net worth is the result of all of those decisions. It’s important because that is where the hopes/dreams of our future live as well.

Most people are familiar with a balance sheet. Assets minus liabilities equal net worth.

Usually, the way the money gets to net worth is from cash flow. So we added the cash flow domain to the balance sheet.

Cash flow is how it gets on the balance sheet, but it is also how it comes off most times. By focusing on cash flow we can look for inefficiencies that cause leaks. When we lose $1 we don’t just lose the dollar, we lose what it could do for us had we kept it. If we can recover those dollars we can recover everything it can do for us. That might be saving or it might be buying more burgers, but either way, it’s better to have it than not.

We often save more money in taxes than your CPA. The goal for a CPA is to make taxes as low as possible that year, and the strategies used to do that aren’t the same as the ones that create long-term tax savings. Sometimes they don’t save us money at all, they just kick them down the road to be paid later. That might be good if taxes are paid at a lower rate and conventional wisdom says we’ll be in a lower tax bracket. With the Drop and pension coordinated properly with your Deferred Comp and other finances, you shouldn’t have a much lower income. Even if you are down a bracket, if tax rates are higher, the amount paid might not be less.

So we help clients measure if it is really a good idea to be doing these things. To create strategies that save taxes long term, not just in accumulation, but in distribution as well. The biggest problem in our industry is the lack of distribution planning.

Conventional wisdom says… save a bunch of money. Invest. Live off interest.

We have to do this so we don’t dip into principal and run out of money. This strategy creates the highest need for savings, lowest income generated,  and highest taxes. So it’s not a very good strategy. Yet everyone does it because they’ve never seen anything else or weren’t in a position to take advantage if they have.

By studying cash flow through retirement, we can coordinate your benefits by measuring alternate distribution strategies that dramatically increase gross income and decrease taxes.

We added protection to the balance sheet too. While the cash flow and savings part is where a lot of the work is done and exciting stuff happens, all of this work is at risk at all times of loss. No one is immune. A lawsuit, fire, theft, vandalism, death, disability… When a loss happens, it goes on the balance sheet. It might reduce assets, increase liabilities, either way, it’ll damage net worth.

It can also affect cash flow, and when it does, it damages our lifestyle. So we work to build an impenetrable layer of protection so loss can’t get in. If we do this well, not only can we protect net worth today, but also the future of that number, which as I said, is really where all of our hopes and dreams live.

Our process gives our clients the power to take control of their finances by having a financial strategy and making holistic decisions. This provides real results now, and in the future.



Your Deferred Comp, Drop, and pension decisions all proactively coordinated with your spouse’s benefits and other financial pieces to benefit you not just at and through retirement, but as you work as well. 

More efficient deployment of cash flow.

Substantially better protection and many times large holes are filled. The fear is that to increase protection, costs will increase. Often we can improve protection without additional cash flow outlay.

More wealth accumulation & much much better distribution of that wealth.

Typically with lower taxes & usually with less risk.

Organized and confident like never before. Our high touch, high tech system helps you always be on top of it.