Goals: Your goals are very much within your control. Sometimes a simple adjustment in what you attempt to achieve can relieve stress and increase the likelihood of your success. At Wise Planning we work with you to clarify and prioritize your goals so that you can choose a path that is within reach yet does not cause needless lifestyle sacrifice.
Risk: Managing risk is fundamental to a sound financial plan. While you have no control over the financial markets, you can manage how much market risk you take through diversification. At Wise Planning, rather than recommending that you take as much risk as you are willing to take, we help position you to take as little risk as is necessary to achieve your goals. We do this by finding your appropriate asset mix among investment classes (stocks, bonds and cash). We then recommend investment vehicles (primarily broad-market index mutual funds or ETFs) to diversify within the investment classes.
Costs: “You get what you pay for” does not always apply in the investing world! A 2010 report by Morningstar, the well-known mutual fund rating company, concluded that the only reliable predictor of mutual fund performance was the expense ratio – the percentage of the fund’s total assets deducted from its returns each year to cover fund management and administrative expenses. Every investment has a price tag. Unlike the department store or the new car lot, however, investment costs are often not apparent. These costs come in the form of commissions, sales charges, advisory fees and expense ratios. High investment costs mean less money working for you. Just as interest compounds over time, so do costs! At Wise Planning, we make sure that our clients are using cost-efficient investment products and are not paying unnecessary fees that do not add value to their financial life.
Tax Efficiency: Though you cannot control tax rates, you can use tax-efficient investment strategies. These may include taking advantage of retirement plans (or accounts) such as 401(k)s, 403(b)s, Traditional and Roth IRAs that allow for tax-deferred or tax-free growth. Wise Planning also incorporates asset location recommendations. Asset location refers to where (in which type of account: taxable, tax-deferred or tax-exempt) the different asset classes should be placed to maximize the tax-efficiency of the portfolio.
Actions: Spending, saving, working and investing –we all have the intention of following a strategy that will bring success. The question is how to convert intentions into actions. A perfect financial plan that is never implemented has no value. At Wise Planning, working with you to implement your plan is an essential part of our process. We also help you avoid reacting to the Wall Street noise by monitoring the plan and recommending changes when warranted by changes in your goals or personal circumstances.