In the financial planning profession, many advisors focus on investment management. The focus is often so strongly on managing investments that all the other components of financial planning which people want and need are ignored. In today’s post I’d like to discuss MoneyCapsules, a process-oriented strategy devised by an advisor in my office which focuses on careful management of one’s entire financial life. It’s a service many people want but don’t explain clearly enough to their financial advisor to get it right. I’ve seen it first hand: once people get a handle on their full financial picture, anxiety levels decrease and decision making becomes much easier.
MoneyCapsules is a service which integrates all of your financial resources into one consolidated picture and identifies areas of strength and weakness. MoneyCapsules is not about helping you select a hot stock, time the market or speculate. It’s about providing a simple framework to help you organize and understand your finances: pre-requisites for making better money decisions.
The MoneyCapsules framework may co-exist with your current financial advisor, family office and brokerage relationships. In fact, it is a useful analytical tool for investors with multiple institutional and advisor relationships. Here’s how it works: First we organize all of your financial information in one place- a personalized, secure Web portal, accessed by computer or smart phone. Link your 401k, IRA, investments, annuities and cash accounts from various institutions to a single Web page, with daily value updates. Next we categorize your financial resources into 8 easy to understand areas of wealth so that you can clearly identify and address financial concerns and/or successes. The final step is making decisions based on proper identification of your needs. The 8 Money Capsules are:
• Cash Reserves / Cash Flow Seeks to provide cash reserve or cash flow for clients who require liquidity and or monthly income.
• Short-Term Goals Seeks to provide low volatility investments.
• Long-Term Goals Seeks to provide long-term capital appreciation by investing in diversified portfolios. Re-fills MoneyCapsule #1.
• Managing the Unexpected Seeks to provide Asset Protection and Insurance for Disability, Long-Term Care, and Death.
• Income Seeks to provide income and guaranteed life-time income. Money we can depend on for life.
• Wills, Advanced Directives & Trusts Seeks to provide for the planned transfer of estate and control of assets, if incapacitated or in case of death.
• Family-Charitable Giving Seeks to provide tax efficient strategies for transferring assets outside of one’s estate, for lifetime and legacy giving.
• Personal Values / Dreams Personal values provide a reason for why we do the things we do. These decisions can have an important effect on our money decisions and risk tolerance.
If you’d like more information on the MoneyCapsules concept or would like to schedule a phone or in-person meeting, feel free to contact me.
Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.