"Do-It-Yourself"

With retirement near, Ann and Ben planned to live off the income from early Social Security, and supplement it with dividends and distributions from their various investment accounts, including 401(k)’s and IRA’s. 

If the market returns on the investments went up, they might spend more. If returns were down, maybe not so much.  They wanted to leave their estate to the children. 

Their investments had been accumulated over the years – years and years of buying individual stocks and mutual funds.  Some were bought after looking at the returns on the company retirement plan brochure and, as they put it, “throwing a dart.” Others were bought after a friend recommended it and still others were acquired from companies who tempted them with ‘promises’ of high returns.  So they had gradually built for themselves a portfolio that they now didn’t understand.   

Being “do-it-yourself” investors seemed easy when the markets went up. But when the markets went down, Ann and Ben got really stressed out.  Eventually, they came to realize they didn’t have the time, interest or specific knowledge to properly manage their investments.  They also knew they had behavioral blind spots that put them at great risk.   It was a relative of Ann’s who referred them to WealthBuilders. 

We analyzed their overall situation, including their income, expenses and investment holdings.  More importantly, we got Ann and Ben to think about how much they would LIKE to spend to give them the life they wanted now.

Then we ‘crunched their number’.

Here’s what we found.

One option was for them to keep doing just what they were doing – plan to live off dividends and distributions, forever prey to market movements, condemned to dip into their savings whenever things got tight. Forever going without.  Forever cutting back.  Afraid to dip too deep. 

Another option was for Ann and Ben to change their mindset.  Plan to spend your liquid investments over your anticipated lifetimes.  They could leave the home and personal effects to their children when they eventually died, but enjoy spending the rest. Even their children were saying that they wished their Mom and Dad would spend it!

So, we helped Ann and Ben understand just how much return they needed on their investments, so they could reasonably expect to avoid premature capital depletion.  We retooled their investment holdings to line up with their tolerance for risk and give them the highest probability for success.  As it turned out, this meant they could actually take LESS risk with their investments, and in the process, consolidate and simplify their portfolio to reduce fees and expenses. 

More important, Ann and Ben got their life back.  No more frantically watching the evening news, looking at financial websites or reading through the finance section of the newspaper. Instead more fun, more eating out, more vacations, more treats for the grandchildren.

For Ann and Ben, their money now makes more sense.  They continue to work with us.   

Let us transform your tomorrow. 

*This is a hypothetical situation based on real-life examples.  Names and circumstances have been changed.  The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investments or strategies may be appropriate for you, consult your financial advisor prior to investing.  Your results will vary.