2025 Financial Wellness Checklist: 7 Steps to a Healthier Future
It’s that time of year when everywhere you look, you’re encouraged to reflect on the previous year and set new goals for the one ahead. Don’t forget to take the temperature of your financial health.
Here we sit in 2025! It’s that time of year when everywhere you look, you’re encouraged to reflect on the previous year and set new goals for the one ahead. Physical and mental health goals, career moves, and personal bucket list items often take center stage. But amid all the dreaming, don’t forget to take the temperature of your financial health.
To improve your overall financial well-being this year, here are a few steps to get you started and position yourself for long-term success.
1. Eliminate Unnecessary Expenses
Start by taking inventory of your subscription services. Remember when you signed up for that free trial of Apple Music or HelloFresh six months ago and forgot to cancel it? Oops! Comb through your credit card statements to identify recurring charges for services you no longer use and cancel them.
Go one step further: For services that have increased their prices—like your internet or cable provider—call and ask if there’s a better offer available. You might be surprised at the deals you can secure simply by asking.
2. Review Your Insurance Coverage
If you own a home, chances are its value has increased in recent years. Now is a great time to review your homeowner’s insurance policy to ensure adequate coverage. Did you know an insurance company will only fully cover damage to your home if your policy covers at least 80% of the home’s total replacement value? Keeping your coverage up to date can save you from financial headaches down the line.
Also, review your life insurance. Is the coverage amount still appropriate given your current expenses, income, and anticipated needs? Regular reviews help ensure your family’s financial security remains intact.
3. Automate Your Savings
One of the easiest ways to build your savings is to automate the process. Set up monthly direct deposits or automatic transfers from your checking account to a brokerage account, high-yield savings account, or IRA. Once it’s set up, you’re less likely to miss the money, and your savings will grow without additional effort.
4. Increase Retirement Plan Contributions
Contributing to your employer-provided retirement plan is a relatively painless way to save for the future. Instead of contributing a flat dollar amount, set a percentage of your salary to defer. This way, your contributions automatically increase as your pay grows.
Consider going one step further by increasing your contribution rate by 1-2% this year. A small adjustment like this can have a significant impact over the course of your career.
Additionally, depending on your financial situation, explore deferring income to the Roth feature of your employer’s retirement plan. This option can provide more flexibility in retirement and potential tax savings over your lifetime.
5. Review Estate Planning Documents
Life changes, and so should your estate plan. Ask yourself:
Are the people you’ve named in your will or trust still the right choices?
Is your medical durable power of attorney assigned to the best person to advocate for you in an emergency?
Have your children reached adulthood, and are you now comfortable naming them as successor trustees instead of your sibling?
These details are easy to overlook but crucial to keeping your estate plan aligned with your wishes.
6. Reevaluate Your Financial Goals
Take time to reassess your financial goals. Are they still aligned with what you hope to achieve in the future? Have your priorities shifted? Organize your list of goals and determine what’s most important to you right now.
Also, consider whether you’re making forward progress. If not, identify the roadblocks that might be holding you back. Evaluating your financial health requires reflecting on where you started, understanding where you want to go, and objectively tracking your progress.
7. Explore Tax-Saving Opportunities
Proactive tax planning can save clients significant money over the course of the entire lifetime. Take advantage of tax-advantaged accounts like HSAs and IRAs. Review your withholdings to ensure you’re not giving the government an interest-free loan or facing a big tax bill come April.
If you’re a small business owner or self-employed, consider strategies like maximizing retirement contributions or claiming proper deductions. Tax planning is a year-round activity that will enhance your financial health.
If your financial plan needs a wellness check, let’s connect.
It’s a privilege to walk alongside you on your journey to optimal financial health. By tackling these steps, you can set yourself up for a brighter financial future in 2025 and beyond.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
House Rich, Cash Poor: Managing Wealth When Your Largest Asset is Real Estate
Managing wealth when your largest asset is real estate requires thoughtful strategies. From tax-efficient tools like 1031 exchanges to diversification through DSTs and UPREITs, each option offers unique benefits and trade-offs. Finding the right path depends on balancing growth, liquidity, and long-term goals while navigating the complexities of real estate investment.
For many Americans, homeownership is their most significant financial asset. However, real estate investments can leave much of your wealth tied up in real estate, and limited liquidity for a more balanced investment strategy.
Fortunately, several strategies exist to manage real estate wealth tax-efficiently, turning equity into liquidity while preserving long-term value. Below, we explore tools like 1031 exchanges, Delaware Statutory Trusts (DSTs), and 721 exchanges (UPREITs) to help you make informed decisions about your financial future.
Strategies for Real Estate Wealth Management
1031 Exchange
The 1031 exchange is one of the most commonly used tools for managing real estate capital gains. This IRS-approved strategy allows you to defer taxes when you sell an investment property and reinvest proceeds into another “like-kind” property.
Pros
Capital Gains Tax Deferral: By deferring taxes, you keep more capital available for reinvestment, enhancing the potential for your wealth to grow over time. This strategy can be applied multiple times as your portfolio evolves, enabling you to align your investments with changing goals or market opportunities.
Estate Planning Benefits: Upon inheritance, heirs receive a stepped-up cost basis, eliminating the deferred capital gains taxes that have been accumulating by using this approach.
Cons
Stringent Timelines: You must identify a replacement property within 45 days of selling your current one and complete the purchase within 180 days.
Active Management Required: You remain responsible for property upkeep and operations unless you combine this strategy with a passive structure like a DST. More on that to come.
Strict Property Rules: Only real property, such as land or buildings, qualifies under 1031 exchange rules, excluding personal property, stocks, or other asset types. This limitation narrows flexibility for investors who may wish to diversify beyond real estate.
When to Use It: Ideal for active investors aiming to upgrade properties, defer taxes, or diversify their portfolios while staying involved in management.
Delaware Statutory Trust (DST)
DSTs provide a way to own fractional shares of large, professionally managed properties while retaining eligibility for 1031 exchanges.
Pros
Passive Investment: Investors enjoy hands-off property ownership with management handled by professionals. This is perfect for those seeking income without operational headaches.
Access to High-Quality Assets: DSTs often include institutional-grade properties like office buildings, multifamily units, or industrial spaces. They offer diversification across geography, tenant types, and sectors.
Ongoing 1031 Eligibility: You can defer taxes on the eventual sale of DST shares by reinvesting through another 1031 exchange.
Cons
Limited Liquidity: DST shares are illiquid, with investors needing to wait for the property’s eventual sale to access funds.
Lack of Control: Investors have no say in operational or sales decisions, which could impact returns.
When to Use It: Best for investors looking for passive income while still leveraging the tax benefits of 1031 exchanges.
721 Exchange (UPREIT)
The 721 exchange allows property owners to convert real estate into operating partnership (OP) units in a Real Estate Investment Trust (REIT), offering exposure to a diversified real estate portfolio.
Pros
Tax Deferral: Immediate deferral of capital gains taxes during the exchange process.
Diversification: Instead of holding a single property, you gain fractional ownership in a REIT, which may include residential, commercial, and industrial properties across markets.
Improved Liquidity: REIT shares are easier to sell compared to physical real estate, offering greater flexibility if you need cash.
Simplified Estate Planning: REIT shares can be divided among heirs more easily than physical properties.
Cons
No Re-Entry to 1031: Once in a REIT, you cannot use 1031 exchanges for future tax deferrals.
Market Volatility: The value of REIT shares can fluctuate, introducing new risks compared to holding a single property.
When to Use It: Ideal for investors ready to exit property management entirely, seeking diversification and either a more liquid portfolio or access to cash.
Choosing the Right Path
Deciding on the right strategy for managing real estate wealth requires careful consideration of your financial goals, risk tolerance, and long-term priorities. Each option—whether a 1031 exchange, DST, or UPREIT—offers specific benefits that cater to different needs, but also comes with trade-offs that must be weighed.
For those seeking to maximize growth, strategies like the 1031 exchange allow for tax-deferred reinvestment, enabling properties to evolve alongside your financial objectives. If diversification and passive management are priorities, transitioning into structures such as DSTs or UPREITs can provide exposure to a broader range of assets without the burdens of direct property management. When planning for future generations, these tools also facilitate tax-efficient wealth transfer, simplifying estate planning and easing the complexities of distribution.
Ultimately, the best approach depends on how you balance factors like liquidity, diversification, and tax efficiency against your personal and financial goals. Thoughtful planning and a clear understanding of your options are essential to ensuring that your strategy aligns with both current needs and future aspirations.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Connelly v. United States: What it May Mean For Your Business
The Supreme Court's Connelly decision reshapes estate planning and buy-sell agreements for business owners.
Last month I spoke to the importance of a buy/sell agreement amongst business owners. To continue that conversation, the recent Supreme Court decision in Connelly v. United States has given even more for small business owners to consider. The case has significant implications that extend well into the owner’s estate planning, and it should prompt them to reconsider how they handle succession plans and ownership structures, especially when buyout agreements are involved. In this article, we’ll break down the key lessons from this case and how they could affect your business.
A Quick Look at the Connelly Case
In Connelly v. United States, the Supreme Court addressed the valuation of life insurance proceeds used in business buyouts, specifically for estate tax purposes. The case involved two brothers, Thomas and Michael Connelly, who co-owned Crown C Supply, a closely held C corporation. They had a buyout agreement in place that allowed the company to redeem the deceased brother’s shares using life insurance proceeds. The crux of the legal dispute was whether those life insurance proceeds should be included in the company’s value for estate tax purposes.
The IRS contended—and the Court agreed—that life insurance proceeds used for this kind of buyout must be counted as a corporate asset when determining the value of the business. This decision increases the taxable value of estates in similar situations and has several important consequences for business owners, especially those relying on life insurance-funded buyouts.
What This Ruling Means for Small Business Owners
If you’re a small business owner or operate a closely held company, Connelly raises serious questions about how buyout agreements are structured and the role of life insurance in those agreements. For many, this decision should serve as a wake-up call to reassess existing plans. Here are some key areas that deserve your immediate attention:
Reevaluate Your Buy-Sell Agreement
Buy-sell agreements are designed to ensure business continuity when an owner passes away or exits the business. In many instances, life insurance policies fund these agreements, with the company using the proceeds to buy out the deceased owner's shares. Prior to Connelly, many business owners believed that the obligation to redeem shares would offset the life insurance value when calculating the company's estate tax valuation. That’s no longer the case.
What you should consider: If your current buy-sell agreement is structured as a redemption agreement (where the business purchases the shares), you could face a higher estate tax bill than anticipated. Now might be the time to explore restructuring your agreement into a cross-purchase plan. In this structure, surviving owners directly purchase the deceased owner's shares, with life insurance proceeds going to them, not the company—thus avoiding an increase in the company’s valuation for tax purposes.
Review Your Estate Plan
The Court’s decision underscores that life insurance proceeds—even when earmarked for business continuity—are considered part of the business’s taxable value. This could dramatically alter the estate planning outcomes for business owners who have carefully crafted their plans to minimize tax burdens.
The estate tax exemption is set to decrease significantly in 2026 as the Tax Cuts and Jobs Act (TCJA) sunsets, and many states have even lower thresholds than the federal government. This ruling could make the difference between owing estate taxes or avoiding them altogether.
What you should consider: Now is a great time to work with your estate attorney to reassess your plan. If life insurance is part of your business’s buy-sell structure, consider whether a cross-purchase arrangement or a trusteed buyout might offer better protection from the kind of tax exposure highlighted in Connelly.
Prepare for Broader Financial Implications
The valuation changes resulting from Connelly aren’t limited to estate tax—they could affect your business’s financial health as well. Increasing the company’s value due to life insurance proceeds could put unexpected pressure on liquidity and cash flow. If your heirs are forced to sell assets or take on debt to cover an unanticipated tax bill, the future stability of your business—and your intended legacy—could be at risk.
What you should consider: You may want to consider purchasing additional personal life insurance to cover potential estate taxes resulting from a redemption agreement. Alternatively, you might explore restructuring the business to protect its value through trusts or family-owned LLCs, which are designed to limit estate tax exposure.
Cross-Purchase Arrangements: A Smarter Option?
One of the biggest lessons from Connelly is that cross-purchase arrangements, where individual owners hold life insurance policies on each other, may offer better protection against valuation complications. With a cross-purchase arrangement, the business’s value remains insulated from life insurance proceeds, and surviving owners receive a stepped-up basis in the shares they purchase.
What you should consider: If your business has multiple owners, a cross-purchase agreement may be a more attractive option than a redemption agreement. While cross-purchase plans can be more complex to manage—especially as the number of owners increases—they can offer significant tax advantages over time. Just keep in mind that each owner will need to hold policies on the others, which can complicate the arrangement.
The Bottom Line
The Connelly decision is a reminder of how critical it is to keep a close eye on the structure of your business succession plans. For closely held businesses that rely on life insurance to fund buyouts, the landscape has shifted in ways that could have serious financial repercussions.
Now is the time to review your buyout or succession planning agreements. Determine whether a redemption or cross-purchase arrangement is the best fit for your business, and make sure your estate planning documents reflect the current legal and tax environment. While Connelly may not be the final word on these matters, it’s a clear call for business owners to be proactive and thoughtful about how they plan for the future.
Smart planning today will go a long way in protecting your business and ensuring your legacy.
Recent Articles Written By Andrew:
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Podcasts Featuring Andrew:
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
2024 End of Year Financial Checklist
Completing an end-of-year financial checklist is essential for setting yourself up for success in 2025. This process will allow you to review your progress and goals from 2024 while also helping you refresh and enhance your financial plan as you head into the new year.
Cash Flow Review
Whether you like to budget or not, assessing your spending habits is the essential first step. All financial progress stems from spending less than you make. If you consistently budget, this is the time to figure out what worked well and what needs to be changed. Think about these questions as you forecast for next year.
How will household income change in 2025?
What significant expenses am I anticipating in the coming year that I can plan for?
Am I saving and investing enough of my income?
Prepare for Tax Season
Much of your tax planning will have to wait until next year, but getting a few items in order can be helpful before tax season. You can collect business expenses, charitable giving receipts, childcare expenses, and other tax-deductible items.
The final piece of preparation for tax season would be to decide how you plan to prepare your taxes. You could do it yourself or hire it out. There is no wrong way to go about it, but now is the time to reach out and find a good CPA that you can work with to optimize your tax situation.
Max Out Your Contributions
The end of the year is the perfect time to review your annual contributions to your retirement accounts. In 2024, employer-sponsored plans such as 401(k), 403(b), or 457 allow you to contribute up to $23,000. It's important to note that this amount does not include any employer match. If you are 50 years old or older, you are eligible for a "catch-up" contribution, allowing for an extra $7,500 of contributions. This raises your total maximum contribution to $30,500 for the year.
The contribution limit for individual retirement accounts (IRAs) in 2024 is $7,000, with a $1,000 catch-up contribution available for those 50 or older.
Review Your Investments
If you have a financial advisor, they should have scheduled a year-end planning meeting by now.
If you manage your investments independently, this is an excellent time to review your strategy, assess your performance, and rebalance your portfolio. If you feel it's time to seek professional help, consider finding a fiduciary advisor who prioritizes your best interests.
Consider a Roth Conversion
Roth conversions involve transferring pre-tax dollars into a Roth account, which will then grow tax-free. This approach can be great for someone nearing retirement with much of their wealth in pre-tax accounts. It can also benefit young professionals with plenty of time for the investment to grow. However, this only makes sense for some, so consult a financial professional to weigh the pros and cons of this option.
Open Enrollment
Open enrollment occurs at different times of the year and is dictated by your employer. It is most commonly presented around early November and allows you to review or change employee benefits options.
This is an excellent time to ensure you get the best insurance plan value. You and your spouse may even qualify for additional plans, such as term life insurance or disability coverage, at little to no cost.
Confirm Beneficiaries
While this does not change often, it is necessary to ensure that it is up to date. Here are some accounts that should have a beneficiary associated with them.
Retirement/Investment Accounts (401k, 403b, 457, and IRAs)
Bank Accounts
Life Insurance Policies
Properly assigning beneficiaries can help you have peace of mind that your loved ones will be cared for.
This checklist can help you clearly assess your financial situation and prepare for success in 2025.
References
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Protecting Your Business’s Future: The Critical Role of Buy/Sell Agreements
For business owners, the importance of buy/sell agreements cannot be overstated. These contracts are designed to protect both the business and its owners by setting clear guidelines for ownership transitions in case of unforeseen events such as death, disability, or retirement. Without such an agreement, businesses can face severe disruptions, leading to internal disputes or financial strain.
A buy/sell agreement helps ensure that ownership changes are handled smoothly by defining how shares will be sold and at what price. More importantly, it prevents the business from falling into the hands of unintended parties, like an owner’s ex-spouse or an outsider who could negatively impact the company’s operations.
By incorporating key provisions such as purchase price determination and funding mechanisms, buy/sell agreements give businesses a solid foundation for navigating ownership transitions, ultimately protecting their long-term success.
Business owners should strongly consider buy-sell agreements to safeguard the interests of both the business and its owners. These agreements are invaluable in setting clear guidelines for ownership transitions in various situations, from unforeseen events to changes in business dynamics. They typically cover:
Regulation of the owners' relationships
Management of the business
Transfer of ownership interests
Privileges and protections for owners
Buy/sell agreements help mitigate risk by preparing for unexpected events, ensuring business continuity, and avoiding costly disputes that can arise without proper planning. Let’s dive into the key components of buy-sell agreements, triggering events, and methods for determining a purchase price.
Triggering Events in Buy/Sell Agreements
Buy/sell agreements are activated by specific "triggering events" that require the sale or transfer of an ownership interest. These events typically fall into three categories, each representing a potential risk to the business:
Third-Party Sale Triggers
Business owners are often concerned about a potential sale to outsiders, as a new owner could disrupt the company’s decision-making process. To prevent unwanted transfers, such as shares falling into the hands of an ex-spouse following a divorce or creditors following bankruptcy, buy/sell agreements often include protections against third-party sales.
Owner Viability Triggers
An owner's physical or mental incapacity can impact the smooth operation of a business. Buy/sell agreements ensure that the company has a plan in place to manage ownership transitions in the case of death or disability. In many cases, the agreement may also outline the use of life or disability insurance as funding mechanisms for the buyout.
Relationship Severance Triggers
When an owner leaves the company, whether through resignation, retirement, or termination, it can create complications for the remaining owners. A buy/sell agreement mitigates this risk by defining the terms for how shares will be handled, preventing a former owner from joining a competitor or disrupting the company's future.
Key Provisions in Buy/Sell Agreements
A well-structured buy/sell agreement should include provisions that address potential challenges and outline clear solutions. These provisions help ensure a smooth ownership transition:
Purchase Price Determination
Methods for determining the purchase price can vary. Common approaches include:
Fixed price (e.g., book value)
Agreed-upon formula (e.g., multiple of earnings)
Agreed-upon methodology (e.g., market-based)
Third-party appraisal by a qualified business appraiser
Restrictions on Transferability & Rights of First Refusal
To protect existing owners' interests, buy/sell agreements may restrict the transferability of shares. This provision ensures that owners cannot sell their shares to outsiders without first offering them to other owners or the business itself.
Employment & Non-Compete Clauses
These provisions help protect the business from former owners who may attempt to start a competing company after leaving. The agreement can restrict such actions, safeguarding the company's market position.
Call & Put Options
Call and put options allow owners to buy or sell shares at a predetermined price, giving them control over the timing and terms of ownership changes.
Funding & Terms of Purchase
Buy/sell agreements often specify how the buyout will be funded, such as through insurance proceeds, company profits, or loans. This ensures the transaction is financially manageable for all parties involved.
Types of Buy/Sell Agreements
There are several types of buy/sell agreements, each with its own advantages depending on the business structure and ownership:
Cross-Purchase Agreements
In a cross-purchase agreement, individual owners purchase life insurance policies on each other. Upon a triggering event, the remaining owners buy out the departing owner’s shares.
Pros: Owners maintain control over their shares; favorable tax treatment for surviving owners.
Cons: Becomes complicated with multiple owners due to the number of policies required.
Entity-Purchase Agreements (Stock Redemption)
In this arrangement, the business itself buys the departing owner’s shares, using a single insurance policy on each owner.
I’ll be discussing this in greater detail next month as the Supreme Court has just issued a ruling that affects how entity purchases are taxed moving forward.
Combination of Third-Party & Business Purchase Arrangements
This hybrid address both cross-purchase and redemption arrangements and may provide right of first refusal provisions for the remaining owners and the business.
Pros: Offers flexibility to decide at the time of the event; suitable for changing business circumstances.
Cons: More complex to structure and manage due to the number of options available.
More on Methods to Determine the Purchase Price
Valuing a business for a buy/sell agreement is essential and can be approached in several ways:
Fixed Price
A simple approach where the owners agree on a fixed price for the shares. However, this method may become outdated quickly if not regularly updated to reflect changes in business value.
Agreed-Upon Formula (e.g., Book Value or Multiple of Earnings)
Formulas offer a straightforward method of valuation, such as using a multiple of the company's earnings. This method is low-cost but can oversimplify the valuation process, potentially leading to inaccuracies.
Agreed-Upon Methodology (Market-Derived)
This method employs an agreed-upon market-based valuation approach to calculate the price. It provides more accurate results than formulas, particularly for businesses that undergo rapid changes in value.
Appraisal by a Qualified Business Appraiser
An appraisal performed by a third-party expert can ensure an accurate and fair valuation. While this is often the most reliable method, it can be time-consuming and expensive.
A well-crafted buy/sell agreement is crucial for any business with multiple owners. It provides a clear plan for ownership transitions, helps protect against unexpected events, and ensures fairness for all parties. Whether you opt for a cross-purchase, entity-purchase, or a combination of both, having a buy/sell agreement in place will help secure the future of your business and avoid costly disputes.
It’s essential for business owners to work closely with legal and financial professionals to tailor the agreement to their specific needs, ensuring it is regularly updated as the business grows and changes.
Recent Articles Written By Andrew:
Recent Publications Featuring Andrew:
Podcasts Featuring Andrew:
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Financial Goal Setting: 5 Simple Steps for Success
I want to make my case for why goal setting matters for your financial picture. A study by Gail Matthews at Dominican University showed the benefits of goal setting, specifically the advantages of having written goals with accountability. Feel free to check out the study yourself, but she found that having written goals gave people a 33% higher chance of success compared to those with unwritten goals. Here are 5 steps to help guide you through your financial goal-setting and give you more confidence in your financial plan.
Step 1: Define Specific Goals
I got my bachelor’s degree in exercise science, and in my program, every class emphasized goal setting. Whether discussing exercise and nutrition or personal finance, achieving a goal must be done with strategy in mind. The strategy I find the most effective in goal setting is called SMART goals. SMART stands for specific, measurable, attainable, relevant, and time-bound. By being specific, you can track progress and know when you’ve achieved your goals. For example, “I am going to invest 5% of my monthly income into a Roth IRA for the next year”.
Specific: Investing into a Roth IRA
Measurable: 5% of monthly income
Attainable: 5% is a manageable contribution
Relevant: Relevant for someone starting to invest
Time-bound: The next year
Step 2: Prioritize Your Goals
The reality is we can’t focus on a bunch of goals at one time. When we try to accomplish too many goals at once, they all suffer, hurting our chance of accomplishing the most important ones. I recommend prioritizing your list of SMART goals down to your top 3. This could be due to urgency or importance. Examples include creating a budget or maxing out your IRA contribution for the year. Jot down all the goals, but don’t set the expectation that you can do them all at once.
If your goal seems too big, break it down into a few smaller goals that will help you see the progress quicker. For example, break down a goal to pay off all debt into paying off credit card debt first, then student loans, and then car loans. This way, you break down a goal that would take 3 years, allowing you to check off one goal each year, making it more manageable.
Step 3: Create A Plan and Track Progress
Now that you’ve established your SMART goals and broken them down by priority, the rubber can hit the road. There are multiple ways in which this can be done well, so find what works for you and stick with it. Research shows that written goals with accountability give you the highest chance for success. Whether you write your goals in a journal, your phone notes, or an app, the important part is that you do it.
Step 4: Use Goals to Cultivate Consistency
This point could be summed up if you read the book “Atomic Habits” by James Clear. If you’re interested, I can’t recommend that book enough. Clear makes the point that small habits that are successfully implemented over time lead to major changes. Essentially, it is easier to make three small changes than to make one major change. This is where accountability comes into play.
If you’re married, you have a built-in accountability partner. One that will likely share the same goals as you. If you’re single, find a trusted friend or family member who can help keep you on track with your goals over time. The beauty of financial goals is that these individual goals often turn into habits that can be automated. In my earlier example of putting 5% of your monthly income into a Roth IRA, by doing this, you build a habit that can be repeated year on year with minimal effort.
Step 5: Learn from Setbacks and Adjust
News Flash: Setbacks will happen for everyone. Nobody is perfectly consistent, and a lack of consistency will lead to setbacks. I don’t say this to discourage you, but hopefully to encourage you. A setback does not equal failure when it comes to goal setting. By readjusting instead of giving up, you give yourself a chance to still be successful. Your financial life is a constantly changing picture, and your goals should be no different. Having goals in place, even after adjusting for unforeseen circumstances, will still put you in a better position than if you had never set the goals to begin with.
Goal setting is an incredibly important way to implement changes to your financial picture. It is how you intentionally go from getting out of debt to saving for retirement and having a bulletproof retirement plan. The beauty of goal setting is that it benefits everyone from the 18-year-old college student to the 72-year-old retiree and everyone in between. Use these steps to sit down and see the benefits for yourself.
References
https://www.dominican.edu/sites/default/files/2020-02/gailmatthews-harvard-goals-researchsummary.pdf
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Should I Buy an Annuity?
Annuities can be a very hot button issue.
Therefore, instead of giving you an answer about whether they are good or not, I thought I would put together a quick video that breaks down the framework I use when considering whether to buy an annuity.
Annuities can be a very hot button issue.
People seem to really love them or really hate them.
I’m not one of those people.
I think they are great in the right situation and not so great in others.
Therefore, instead of giving you an answer about whether they are good or not, I thought I would put together a quick video that breaks down the framework I use when considering whether to buy an annuity.
Based on the video, what are your thoughts? Do you think an annuity might be right for you?
This information is for educational purposes only and should not be taken as advice. Past performance does not guarantee future results.
“I am passionate about helping people improve the efficiency of their finances!”
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
MoneyGeek Feature: Average Cost of a Wedding
Leanne Rahn had the privilege to be featured in MoneyGeek to talk to readers about the “Average Cost of a Wedding”.
Ever wonder why wedding prices seem to skyrocket? From personalized touches to seasonal trends and logistics, there are several factors that can inflate the cost of your big day. Leanne dives into the reasons behind these wedding markups and offers practical tips on how couples can manage their wedding budget without compromising on what matters most.
Discover how to prioritize key elements of your special day while keeping costs under control!
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
MoneyGeek Feature: Financing Your Wedding
Leanne Rahn had the privilege to be featured in MoneyGeek to talk to readers about “Financing Your Wedding”.
Are you considering a wedding loan but unsure if it's the right choice? Leanne will guide you through key factors to help you decide, from cash flow to debt-to-income ratio, and how it might affect your future plans like buying a home. Learn about smart ways to maximize a wedding loan if you get one and explore alternative financing options that might surprise you.
Start your marriage on the right financial foot with this comprehensive guide!"
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
Nourishing Your Body and Bank Account: Recipes for Busy Healthcare Professionals
As healthcare professionals, you know that staying healthy is more than just the occasional workout or salad—it’s about consistent habits that lead to long-term well-being. The same is true for managing your finances. Whether investing for retirement or planning your meals for the week, both areas require thoughtful strategies that can compound into significant benefits and savings over time.
Just like a balanced diet, a well-rounded financial plan helps you build resilience and stability. Think of budgeting as meal planning: you wouldn’t eat junk food every day and expect to feel great and wouldn’t spend impulsively without considering how it affects your financial future. Both require discipline and foresight.
In both finances and health, consistency is key. Saving a portion of your income each month may seem small at first, but over time, those savings can grow through compound interest. Similarly, making healthier food choices daily—like adding more vegetables or reducing processed foods— can compound into a healthier you. The smarter choices you make today, the more you set yourself up for success tomorrow.
I’m excited to have partnered with Bre Bock on this blog post. She has provided 10 simple suggestions on how to easily add additional nutritional value to recipes you may already be making for you and your family.
She is a Registered Dietitian and owner of Revived Nutrition Counseling. Her focuses are gut health, heart health, and general health management for her clients. She is also an HAES aligned dietitian and approaches sessions with her clients within an intuitive eating framework.
If you have been thinking about meeting with a Registered Dietitian feel free to schedule a meeting with her or follow her on Instagram @revivednutritionrd.
Let me know what your favorite recipe tip is, I know I plan on trying all of them.
1. Cowboy Caviar
A nutritional vegetarian powerhouse with legumes, bell peppers, cilantro, canned corn, and red onion - add a few seasonings like cumin, smoked paprika, chili powder, and lime juice for a very quick, and inexpensive meal.
I like to pair mine with a whole grain tortilla chip for some crunch and usually will serve with diced avocado, and a side of fresh fruit.
2. Mac & Cheese 3 Ways
What kid (us big kids too) doesn't love cheesy mac? This easy staple can be improved upon with several quick and easy add-ons.
-Tuna & peas (canned tuna in water and frozen peas work great here!) I usually steam the peas separately. You can also boil them with the noodles to save time. Stir in the tuna after the mac is made.
-Add in a steamable bag of broccoli or California blend.
-Switch it up with a box of white cheddar mac and add in pre-shelled frozen edamame. You can throw the edamame in about halfway through boiling the noodles as they only need about 4 min to cook from frozen. Edamame is a great way to amp up your fiber and protein intake!
3. Red Beans & Rice
This is a meal that makes great leftovers and there is always plenty to share! This is my own version below.
Directions
1. Start by steaming brown rice on stove top or rice cooker according to directions on packaging.
2. In a large skillet, start by heating oil over medium heat.
3. Add in onion and cook until translucent, then add garlic and cook for another 1 minute.
4. Add in bell peppers and saute until peppers start to soften.
5. Add in the kidney beans and stir together, cook for about 5 minutes.
5. add in the seasonings (chili powder, smoked paprika, and cumin) and mix to incorporate.
6. Add in the brown rice once cooked and stir in the salsa and lime juice.
7. Turn off the heat and mix in the cheese.
8. Serve with diced avocado and/or sour cream if desired.
Ingredients
1 cup brown rice
1 can red kidney beans (rinsed and drained)
1 Tbsp avocado oil
1/2 large onion, diced
1/2 cup yellow bell pepper, diced
1/2 cup green bell pepper diced
2 Tbsp minced garlic
1/2 cup jarred salsa
1 cup cheddar or monterey jack cheese
1 tsp chili powder
1 tsp smoked paprika
1/2 tsp cumin
2 Tbsp lime juice
1 avocado, diced
4. Salmon Patties with Sweet Potato and Cauliflower Rice
This is a great option if you're short on time and are willing to use your microwave. You can use a frozen steam bag of cauliflower rice which cooks in about 4.5 minutes. You can also cook a sweet potato/regular potato (or multiple) in the microwave in a bowl for about 8 minutes with a few inches of water, just pierce the potato with a fork a few times. The salmon patties go in the skillet cooking for about 10-12 minutes while the potato and cauliflower cook in the microwave - so you've got the whole meal done in about 15 minutes.
If you want to make your salmon patties from scratch vs picking up frozen ones, that does take a bit longer, but if you're OK with using a frozen option (the ones from Aldi (Fremont Wild Caught Salmon Burgers) are $1.32 a patty - which feels pretty reasonable to me).
5. Protein Pancakes
The Kodiak pancake mix is a great choice as it's whole grain (high fiber) and high protein. You can increase the protein count by adding an egg and/or swapping milk for water. I like to add in a little cinnamon and applesauce to increase the nutrient factor. Adding in blueberries or peaches are also favorites, for a fruity pancake. Serve with turkey or chicken breakfast sausage.
6. Egg Bites with Veggies
This is an easy recipe to bulk prep. It also allows you to make several varieties at a time. The basics are 6 eggs, a little black pepper, and 3/4 cup of cottage cheese - put it in a blender and blend until smooth.
To boost nutrient value, add whatever vegetables (spinach, peppers, onion, mushroom, etc) you'd like. Saute the veggies and add a little on the bottom of 12 muffin cups, pour your egg evenly over the cups. Finish by adding a little more of the veggies on top. Feel free to sprinkle with a little cheese as well! Bake for 18-22 minutes.
7. One-Pan Zucchini Skillet
This is an oldie but a goodie (a childhood favorite!) Very easy and quick! :)
Directions
1. Place avocado oil in a skillet and heat over medium.
2. Add onion and cook for 1-2 minutes.
3. Add ground turkey.
4. Add steak seasoning and cook meat until brown.
4. Drain any excess fat if needed.
5. Add zucchini and cook until softened.
6. Mix in cheese and serve with whole grain bread or over brown rice/quinoa (bonus points if you’ve cooked extra rice or quinoa from another meal!)
Ingredients
1 Tbsp avocado oil
1/2 onion, diced
1 lb ground turkey
1 Tbsp Steak Seasoning (low sodium steak seasoning)
1 large zucchini, sliced into 1" pieces
1 cup part-skim mozzarella cheese
8. Warm Salad Kits
This next one may sound weird, but hear me out! Take a salad kit, perhaps a Thai or Asian-inspired option, saute with a little olive oil, and add some diced chicken breast/ground turkey/or shrimp. You can use the salad dressing as a sauce. Consider adding extras like cashews, slivered almonds, or canned (in their own juice) mandarin oranges. Serve it over a carb like brown rice, quinoa, or a brown rice noodle.
9. Sausage and Veggie One-Pan Meal
This is a great way to clean out your fridge, no one likes to waste money throwing produce away! Whatever leftover vegetables you may have lurking around (onion, sweet potato, broccoli, cherry tomatoes, carrots), toss with 1-2 Tbsp avocado oil. Slice and add a package of chicken sausage (I love the apple chicken sausage from Aldi or Costco).
Roast at 400 for 20-30 minutes depending on what vegetables you end up using - you'll need more time for things like carrots/potatoes and less time for things like onions, cherry tomatoes, and broccoli.
10. Marinara Chicken Bake
Take a few fresh chicken breasts and spread some marinara or pesto sauce over top, add a slice of mozzarella cheese and sliced tomato on top, and bake at 350 for 20-30 minutes or until internal temp reaches 165 degrees. Broil for 2 minutes so the cheese is nice and bubbly/golden. If you’re short on time, serve with a steamable bag of green beans/red potatoes (Birds Eye has a good option).
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Avoid These Common Financial Pitfalls: A Guide for Doctors, APPs, and Nurses
Navigating the financial landscape can be challenging, especially for medical professionals who have spent years focused on their education and training. Whether you're a doctor, advanced practice provider (APP), or nurse, understanding common money mistakes and how to avoid them is crucial for building a secure financial future. In this blog post, we'll explore some of the most frequent financial pitfalls encountered by healthcare professionals and offer practical tips to help you steer clear of them.
Common Financial Mistakes
Overlooking Student Loan Management
Student loans can be a significant burden for medical professionals. Review all your loans to understand which are public vs. private, the interest rates, and the repayment terms. This knowledge could save you tens of thousands of dollars in the future.
If your loans are public, evaluate which loan repayment option is best for you. Many healthcare employees work for non-profit hospitals. If you plan to work for a qualified non-profit for ten years, Public Service Loan Forgiveness (PSLF) will likely be the best option. You will want to make sure your student loans are direct federal student loans and not Federal Family Education Loans if you plan to pursue PSLF.
If you do not work for a qualified non-profit or have private student loans, evaluate which repayment option suits you best and determine how quickly you want to pay off the loans. I have had good experience with GradFin which offers free initial consults to help review your loan repayment options.
Increasing Lifestyle Expenses Too Quickly
Transitioning from a student budget to a professional income can be tricky. Many healthcare professionals fall into the trap of increasing their living expenses too quickly once they start earning a full-time salary.
The White Coat Investor encourages doctors to “continue to live like a resident” for a few more years before increasing their lifestyle. This advice applies to APPs and nurses as well. Doing so can free up money to pay down debt, jump-start retirement savings, and allow more thoughtful financial decisions about your lifestyle.
Delaying Retirement Savings
It might be tempting to delay retirement savings, especially if you're still paying off student loans or adjusting to a new salary. However, the benefits of early and consistent retirement contributions are tremendous.
Take advantage of employer 403(b) or 401(k) matches, HSA contributions, and backdoor Roth IRA contributions if possible. Starting now can be a significant step toward financial independence. Most people do not regret saving sooner for retirement, but many regret waiting too long.
Ignoring Insurance Needs
Insurance is a critical component of financial planning that often gets overlooked. Disability insurance, life insurance, and malpractice insurance are essential for protecting yourself and your family against unforeseen events. Understand the types of coverage available and choose policies that fit your specific needs and circumstances. Proper insurance coverage provides peace of mind and financial security.
I recommend avoiding whole life/permanent life insurance for most healthcare providers due to high expenses and fees limiting potential upside. If someone tries to sell you permanent life insurance, fully understand how it would be beneficial to you and what the costs will be. Consider getting a second opinion and exploring term life insurance instead, investing the difference.
Actionable Financial Tips
Building an Emergency Fund
One of the most important steps in financial planning is establishing an emergency fund. Aim to set aside 3-6 months of living expenses in a high-interest savings account or money market fund. This fund acts as a safety net in case of unexpected expenses or income loss.
Start small if needed, and gradually build up your fund over time. The peace of mind an emergency fund provides is invaluable. If you are single with no kids, 3 months may be enough. If you have kids and/or are married, consider aiming closer to the 6-month mark.
Investing Wisely
Investing is a powerful tool for growing your wealth, but it's essential to approach it wisely. Educate yourself on the basics of investing in the stock market and consider low-cost mutual funds and index funds. Diversifying your investment portfolio can help manage risk and improve your chances of long-term success. Learning about expense ratios and the fees associated with investing is also critical.
Evaluate your risk tolerance and risk capacity when investing. Everyone is happy during the years when the market goes up, but some people let their anxiety get the best of them during the years when the market drops. Having your investments set up based on your individual risk level is crucial to avoid making emotional decisions during periods of market volatility.
Seeking Professional Financial Advice
Working with a financial advisor can provide significant benefits, especially if you're navigating complex financial decisions. A good financial advisor can help you create a comprehensive financial plan tailored to your goals, manage your investments, and provide guidance on tax strategies and retirement planning.
If you decide to work with a financial advisor, I recommend:
Looking for one who is a fiduciary, meaning they must look out for your best interest.
Finding one that is fee-only, which means they do not get commissions.
Clearly understanding what fees they are charging and what services they provide.
Don’t Wait, Start Today
Avoiding common financial mistakes and implementing smart money strategies is crucial for medical professionals aiming for long-term financial health. By managing your student loans, budgeting wisely, prioritizing retirement savings, securing appropriate insurance, building an emergency fund, investing prudently, and seeking professional advice, you can set yourself up for a secure and prosperous future. Remember, taking proactive steps today can make a significant difference in your financial well-being tomorrow.
If you need more personalized advice or have specific financial questions, don't hesitate to reach out. Your financial health is just as important as your physical health, and taking care of it now will pay off in the years to come.
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Next Avenue Feature: Degrees of Difficulty
Ben Lex was recently featured in a Next Avenue article titled “Degrees of Difficulty.”
In it, he discusses smart financial strategies for approaching a spouse returning to school. Check out Ben’s insights—they’re great tips for navigating your financial life with advanced education.
Financial Planning Feature: Back-to-school is a reminder for financial advisors to review clients' educational savings goals
Andrew Van Alstyne had the privilege to be featured in Financial Planning, where he shares insights on the importance of revisiting educational savings strategies during the back-to-school season.
Andrew emphasizes the need for financial advisors to help clients stay on track with their educational savings goals by regularly reviewing and adjusting their college savings plans.
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Creating an Impactful Transfer of Wealth: Leaving Blessings, Not Burdens with Simple Strategies
Passing on wealth to the next generation is more than just managing financial assets—it's about ensuring your values, wisdom, and legacy endure. This article explores simple strategies to transfer both financial and qualitative capital, helping you create a lasting legacy for your family.
Passing on wealth to the next generation is a crucial aspect of financial planning, and doing so in a way that minimizes tax implications is a priority for many families. The key lies in finding the balance between effective and straightforward while avoiding unnecessary complexity. There are practical methods available that can simplify the process for your family, regardless of your net worth. In this article, we’ll explore a range of strategies, including the family bank philosophy which is suitable for various net worth levels if you look beyond the financial impact. To that point, we’ll discuss the importance of passing on lasting philosophies and memories to your heirs, ensuring that the wealth transfer is not just about financial capital but also about the qualitative capital such as the values and wisdom that have guided your journey. By integrating these approaches, you can create a meaningful legacy that extends beyond mere monetary value.
Understanding the Lifetime Gift Tax Exclusion
The lifetime gift tax exemption can be a crucial element in estate planning. As of 2024, the exclusion allows individuals to gift up to $13.61 million over their lifetime without incurring federal gift taxes. For those with a net worth below this threshold, complex legal structures usually prove unnecessary without additional extenuating circumstances. Simpler strategies can effectively transfer wealth while minimizing tax implications. However, even for those exceeding this limit, the preference should still lean towards simplicity. Overly complex legal structures can create additional burdens and complexities for both the givers and the recipients. Understanding the implications of the lifetime gift tax exclusion can help guide more straightforward, yet effective, wealth transfer strategies.
Simple Wealth Transfer Strategies
Several simple strategies can facilitate the transfer of wealth while minimizing tax burdens:
Annual Gift Exclusion
The annual gift exclusion allows individuals to gift up to $18,000 as of 2024 per recipient per year without affecting the lifetime exclusion. This strategy effectively distributes wealth gradually over time and can be particularly beneficial for families looking to support multiple heirs.
529 Education Savings Plans
Another popular option is 529 education savings plans, which offer tax-free growth and withdrawals for qualified education expenses. You can contribute up to the annual exclusion amount each year or, contribute up to five years worth ($90,000 in 2024), and then account for it on tax form 709 over the following five years without triggering the need for the lifetime exemption. An added benefit after the passing of Secure Act 2.0 is up to $35,000 can be converted to a Roth IRA if not used for education expenses.
Direct Payments for Medical and Educational Expenses
Making direct payments for someone’s medical and educational expenses is another simple and tax-efficient strategy to transfer wealth. Payments made directly to the service providers are not considered taxable gifts, allowing you to provide substantial financial support without affecting your gift tax exclusion amounts. While this doesn’t directly contribute to an immediate accumulation of wealth, by eliminating debt, you are essentially removing the single largest barrier for Americans to build wealth of their own.
Donor-Advised Funds (DAFs)
A donor-advised fund is a charitable giving vehicle that allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. While this strategy primarily focuses on charitable giving, it can also help reduce your taxable estate and involve your family in philanthropic activities.
Roth IRA Conversions
Converting a traditional IRA to a Roth IRA can be an effective strategy for wealth transfer. Although taxes are paid at the time of conversion, the Roth IRA grows tax-free, and withdrawals are tax-free for the beneficiaries. This strategy can be particularly advantageous if you expect your heirs to be in a higher tax bracket in the future.
The Family Bank
The family bank concept is a versatile tool for wealth transfer that can be adapted to various net worth brackets. Essentially, a family bank is an informal arrangement where family members can borrow funds at low or no interest rates, providing a flexible way to transfer wealth within the family.
How the Family Bank Works
The family bank can facilitate smaller loans for education, business startups, or home purchases, all while maintaining control and oversight within the family unit. Higher net-worth families can use the family bank for more significant ventures, such as funding larger business investments or real estate acquisitions. This system allows wealth to stay within the family and be used to support each other’s financial growth.
The key to a successful family bank is implementing it with the right intentions. Clear communication and documented agreements are essential to ensure all family members understand the terms and expectations. This system fosters financial responsibility and cooperation within the family, making it a valuable tool for wealth transfer.
Passing on Qualitative Capital
While financial capital management is important, it should be looked at as merely a tool. Passing on other forms of capital creates a lasting legacy that will allow your family to retain its prosperity longer than the statistical average of three generations. Heirs who understand the values and principles that guide your wealth accumulation are better equipped to manage and grow that wealth responsibly.
There are five forms of capital in addition to financial forms your family should work to build:
Social – a dedication to positively shaping the community which they are a part of.
Structural – having a deep understanding of all the family’s doings and the ability to navigate it effectively.
Family Relationship - the ability to engage and support members of the family across generations.
Legacy – the family brand, what makes the family unique and gives all members a sense of pride.
Human - individual family members’ physical and emotional health, as well as their ability to learn, grow, and adapt.
Family traditions, stories, and personal experiences should be shared through regular family meetings, written memoirs, or video recordings. These practices help instill a sense of history and continuity, reinforcing the family's core values and philosophies.
Creating a family mission statement can also be a powerful tool. This statement outlines the family's shared values, goals, and vision for the future, providing a guiding framework for decision-making and wealth management.
Ultimately, the goal is to ensure that heirs understand the intent behind the wealth transfer. When they see that it comes from a place of love and care, they are more likely to appreciate and responsibly manage the assets they receive. This holistic approach to wealth transfer ensures that both financial and non-financial legacies are preserved.
The true essence of passing on wealth is to create a blessing, not a burden for loved ones to enjoy. By prioritizing simplicity and intentionality, you ensure your heirs receive not just financial assets but also the values, wisdom, and love that guided your journey. Whether through the family bank concept or starting off more simply by sharing cherished traditions and philosophies, the goal is to foster a legacy of care and responsibility. When wealth transfer is instilled with these emotional aspects, it becomes a source of inspiration and support, helping your heirs thrive and carry forward the family’s principles and memories.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
Fiduciary Financial Advisors does not give legal or tax advice. The information contained does not constitute a solicitation or offer to buy or sell any security and does not purport to be a complete statement of all material facts relating to the strategies and services mentioned.
Couples Synergy Podcast: Money Matters for Couples
Andrew Van Alstyne had the privilege to be featured on the
Couples Synergy Podcast with Dr. Ray & Jean Kadkhodaian.
Andrew recently joined Dr. Ray and Jean Kadkhodaian on the Couples Synergy Podcast for episode 321, "Money Matters for Couples." In this conversation, they explore the complexities couples face when managing finances together, highlighting the significance of open communication and mutual understanding. The episode offers practical advice on aligning financial goals and emphasizes the importance of collaboration in building a secure financial future together. Discover how adopting these strategies can strengthen relationships and set the stage for long-term financial stability.
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Fox Business Feature: Financial experts reveal how Americans can prepare for the possibility of a recession
Andrew Van Alstyne had the privilege to be featured in Fox Business to talk to readers about best practices in preparing for times of economic uncertainty.
Andrew discusses the importance of a fully funded emergency fund along with addressing liquidity concerns in volitile times.
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Beyond The Paycheck Podcast with Paula Christine: Transforming Life Through Financial Literacy
Andrew Van Alstyne had the privilege to be featured on the
Beyond The Paycheck Podcast with Paula Christine.
Andrew recently had the opportunity to join Paula Christine on the Beyond The Paycheck Podcast. In this episode, they discuss the everyday challenges many face when stepping into adulthood and the common hesitation parents experience in teaching financial principles to their children. Discover the importance of early financial education and how instilling good money habits in children can pave the way toward a financially secure and fulfilling future
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Financial Freedom Podcast with Dr. Christopher Loo: Mastering Generational Wealth
Andrew Van Alstyne had the privilege to be featured on the
Financial Freedom Podcast with Dr. Christopher Loo.
Andrew recently had the opportunity to join Dr. Christopher Loo on the Financial Freedom Podcast. In this episode, they explore the crucial topic of generational wealth and how to effectively manage and transfer wealth across generations.
Click the Links Below to Watch or Listen to the Full Episode:
Fiduciary Financial Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
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Net Worth Tracking: The Underutilized Financial Tool
When it comes to tracking finances, budgeting is likely what you think of, and rightly so. Budgeting continues to be the best method for establishing your monthly income and expenses to ensure you are on track. What I am suggesting is not a replacement for budgeting but a complement to it. Tracking your net worth allows you to see progress across your financial picture over the long term. Let’s dive into this underutilized tracking method that can significantly impact your financial outlook.
How to Figure Out Your Net Worth
The first step in calculating your net worth is understanding the necessary information. You can think of net worth as a mathematical equation. The equation goes: Assets - Liabilities = Net Worth. To break it down even further, I will often explain net worth as the difference between what you own and what you owe. What you own (assets) would consist of your home, vehicles, investments, money in the bank, and other tangible goods. What you owe (liabilities) would be any home loan, auto loan, student loan, or other consumer debt.
There is no shortage of methods for tracking net worth, so the best method will ultimately be what works for you. There are plenty of Net Worth Calculators on the internet, but I like to use the Schwab Net Worth Calculator. Others may prefer to create their own spreadsheet. Both methods are great ways to calculate and track your net worth.
How Often to Track
Once you know what comprises the net worth statement, you need to figure out how often you will track it. This is a preferential component, but the most effective frequency is calculating and recording your net worth every year. Because of fluctuations in cash flow and investment performance, tracking on a monthly or quarterly basis would not have much benefit. Doing this yearly makes the most sense because enough time has passed to see legitimate progress. Many people do an end-of-year financial review, and adding this into that process can be simple.
The other reason I like the year mark for calculation is that net worth is intended to complement your budget. Your monthly budget ultimately leads to the progress you see in your net worth statement. It takes the monthly victory of following your budget and shows you a more substantial victory by compounding those smaller wins over the course of a year.
The Benefits of Tracking
All this information is excellent, but why do it? Where does the benefit actually come into play with tracking net worth? The main advantage lies in the bird' s-eye view of your financial well-being. It provides you with context on financial components that your monthly budget doesn’t take into account. Seeing overall liabilities go down and, in turn, watching your asset total rise over the years can be an excellent encouragement to stay the course.
The final benefit of net worth tracking is its opportunity to measure success based on your progress instead of basing it on others. No two people have the same financial picture, so why compare to someone in an entirely different circumstance? Often, we can't help ourselves from it. But by tracking your net worth year after year, success is measured by your improvement from the last year and not by how your number stacks up to those around you.
The “Secret” to Growing Your Net Worth
The final question that often accompanies conversations about net worth is how to improve your number. Honestly, it’s pretty simple, and the answer isn’t anything groundbreaking—consistent effort. By being consistent over time, you allow compounding growth to occur. Not just when it comes to your money compounding but also the good habits associated with money management. Much of this comes back to the foundational principles I discuss in my article, “Mastering Your Money: Budgeting Essentials and When You Need Them.” The “secret” to improving your net worth is consistent effort over a long enough period.
Final Thoughts
Net Worth tracking doesn’t have to be very time-consuming, especially if it is done only once a year. Taking an extra 30 minutes at the end of each year to calculate your net worth may quickly become your favorite way of tracking financial progress. Remember, this is not intended to replace your monthly budget. If done properly, your net worth statement will be an amplified version of your monthly efforts and diligence.
References
https://www.schwabmoneywise.com/net-worth-calculator
Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
The Power of a Family Bank
Discover the power of a family bank: transform your wealth management. Many American families face the challenge of preserving and growing their wealth across generations. The concept of a family bank offers a robust solution, providing a structured system to manage and utilize family wealth effectively.
Many American families often face the challenge of preserving and growing their wealth across generations. The concept of a family bank offers a robust solution, providing a structured system to manage and utilize family wealth effectively. Drawing inspiration from Emily Griffiths-Hamilton's "Build Your Family Bank" and James E. Hughes Jr.'s "Family Wealth," this guide introduces you to the philosophy and logic behind creating a family bank. Let us explore how this powerful strategy can transform your wealth management approach.
Initial Steps to Establish Your Family Bank
Establish Leadership and Oversight
Set up a governance framework with clear roles and responsibilities. Typically, this involves a family council or board of directors that oversees the bank's operations, makes key lending decisions, and enforces policies. A structured governance system ensures transparency, accountability, and consistent decision-making.
Develop Lending Policies
Set transparent lending policies, including who can borrow, for what purposes, interest rates, and repayment terms. Incorporate the Applicable Federal Rate (AFR) to ensure compliance with tax regulations of family loans. Family members should submit business proposals to acquire loans, fostering a professional and disciplined approach to borrowing.
Implement Family Financial Education Programs
Provide ongoing financial education to family members through family summits or retreats, educational resources, and mentorship programs with individuals outside of the family. These initiatives should be specifically tailored to different age groups and financial literacy levels, ensuring that everyone can learn and grow at the life stage they are in.
Continuous Improvement
Regularly evaluate the performance of the family bank, reviewing loan impacts, financial health, and policy adherence. This ongoing assessment allows for timely adjustments, ensuring the bank remains effective and aligned with its goals. An idea format for these meeting is at an annual family retreat.
Benefits of a Family Bank
Wealth Preservation
A family bank helps preserve wealth by keeping financial resources within the family, reducing reliance on external financial institutions, and retaining interest payments within the family circle. This internal circulation of funds strengthens the family's financial base.
Fostering Innovation
Family banks can be a crucial source of funding for entrepreneurial ventures. By providing capital to family members with innovative ideas, the family bank fosters a culture of entrepreneurship and business growth, encouraging family members to pursue their ambitions with the support of the family. This also improves the overall competencies of the family as they gain knowledge in these new ventures.
Strengthened Family Bonds
The collaborative nature of a family bank strengthens family bonds. By working together towards the overall health of the family and the family bank, family members develop deeper trust and cooperation, enhancing family unity.
Empowering Financial Decision-Making of Future Generations
The educational aspect of a family bank improves financial literacy among family members. This knowledge equips them to make informed financial decisions and manage their resources effectively, contributing to their personal and professional success.
Shifting Future Growth Opportunities to Younger Generations
A family bank allows for the strategic shift of financial risk to younger generations who are better positioned to manage it. This can include funding new ventures or investments, enabling older generations to safeguard the growth of their wealth while empowering younger members to take calculated risks.
Special Considerations
While a family bank offers numerous benefits, it also comes with potential risks and downsides that need careful management:
Family Dynamics
Managing financial relationships within a family can lead to conflicts, especially if there are disagreements over lending decisions or repayment issues. Establish clear policies and dispute resolution mechanisms through a family board comprised of multiple family members in addition to outside advisors to address conflicts promptly and fairly. In addition to the board, regular family meetings and transparent communication can also help in mitigating misunderstandings.
Risk of Family Loan Defaults
There is always a risk that family members may default on loans, which could strain family relationships as well as the bank's financial health. Implementing a family investment policy statement for lending policies in addition to requiring detailed business proposals for loans by all family members. The family should also establish plans for how they would like to manage defaults should they occur.
Governance Challenges
Ensuring effective governance can be challenging, particularly if family members lack the necessary experience or commitment. Create a strong governance structure with experienced members and include external advisors that have the family’s best interest at heart.
Maintaining Financial Discipline
Ensuring that all family members adhere to the established policies and guidelines can be difficult as a family grows and evolves. Continuously work to ensure family policies are being enforced consistently and conduct regular audits. Foster a culture of accountability through transparent reporting and setting clear consequences for policy breaches. This may include excluding family members from use of the family bank.
The Rockefeller Centre in New York City
A Real-Life Example of a Successful Family Bank
The Rockefeller family has long used family banking principles to preserve their wealth across generations. By focusing on stewardship and long-term planning, they have maintained their financial legacy. The Rockefellers emphasize financial education and mutual support, ensuring that each generation is equipped to manage and grow the family’s wealth. Their family bank supports entrepreneurial ventures, philanthropic efforts, and educational initiatives, reflecting their values and long-term vision.
Creating a family bank can be a transformative strategy for individuals looking to manage and preserve their wealth for future generations. By fostering a family-wide view of financial stewardship, education, and mutual support, a family bank can not only secure a financial legacy but also promote family unity and fiscal discipline. I hope this guide has provided you with valuable insights into the power and potential of a family bank. If you have any questions or would like assistance in establishing your own family bank, it would be an honor to help you.
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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third-party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.
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