This is a client case study to help demonstrate how Lighthouse Financial Advisors serve you!
John & Sue are in the middle of their careers with two pre-teen kids. They have never made as much money as they do now, but they are unsure where it all goes and what action to take for current & future goals. They have various uncoordinated accounts and advisors (CPA, attorney, insurance salesmen, and investment advisor) that rarely work together or know what the other is doing. We bring all aspects of your financial life under one roof and act as quarterback of your financial planning team.
INVESTMENTS: John enjoys following the stock market and pays an investment advisor to actively manage his various accounts. His investment performance has been below the industry average for his risk tolerance due to frequently selling and buying at the wrong times. He does not know how if his accounts are viewed comprehensively or if tax efficient, nor exactly what fees are being paid.
LFA Way: determine risk tolerance based on their specific situation and need for risk. Use extremely low cost, academically proven investment principles for long term wealth preservation and creation. Reallocate based on life changes and market movements. No hidden fees or extra investment expenses while being managed in the most tax efficient way possible.
ESTATE PLANNING: They never updated estate planning documents or beneficiary designations after the kids were born. Should the worst happen, kids would receive everything outright and courts would have to decide on legal guardians.
LFA Way: We guide you through all the estate planning decisions and work with attorney to create documents. Guardians have been named, beneficiaries have been named on all accounts, and a plan set should minor children inherit large sums of money. Power of Attorney and Medical Directives are done at the same time to cover all worst case scenarios.
CASH FLOW: Income is up but so are expenses. No real idea of where it all goes or what level of spending should be planned for to reach and maintain financial independence.
LFA Way: We set up a cash management system to track overall spending, with a focus on saving the right amount, not on a “budget”.
FINANCIAL INDEPENDENCE: They have a vague sense of what life after full time work looks like, but don’t know how much is needed or how to get there.
LFA Way: We believe “retirement” is just the beginning of Financial Independence, not the end of work. We illustrate multiple scenarios, but keep it simple focusing on savings targets, growth rate, and timing. Life happens unexpectedly and we are always here to provide a fresh look at your current situation to plan accordingly.
EDUCATION PLANNING: An education savings plan has been established, but they are unsure about how much to save versus saving for themselves.
LFA Way: We discuss different approaches & savings accounts for meeting education expenses and help prioritize savings goals.
GOAL SETTING: Goals have always been vague and undefined; would be happy to lead a successful, healthy life with the family. This is a terrific start, but vague and very hard to plan for.
LFA Way: work together to determine what is truly important to you, set specific goals and timeframes. We help clients/families realize dreams they didn’t even know they had.
INSURANCE: Both have a few life insurance policies, term and whole/universal life. They don’t know if it’s enough, cost effective, or the right type of coverage. They also only have the bare minimum disability coverage and no idea if personal auto/home/umbrella insurance is adequate or cost effective.
LFA Way: We coordinate employer coverage with private coverage through low cost providers, foregoing unnecessarily complex & expensive products.
SMALL BUSINESS/ENTREPRENEUR: John owns his own small business, but doesn’t know many of his key metrics, the best retirement plan, or tax planning strategies. His accountant only prepares taxes, but is short on planning ideas during the year.
LFA Way: We set up online books to virtually track P&L and Balance sheet to prepare ongoing tax projections and planning ideas before year end, when most tax planning actually takes place.