At Financial Foundations, we take a holistic approach to our wealth management services. Our process begins by creating a personal financial plan: your blueprint for future success. Understanding where you are today and where you need to be in the future allows us to identify two critical goals:
- Your Wealth Accumulation Target (WAT): this is based on your Personal Financial Plan (the WAT is the amount of wealth necessary to enjoy a successful retirement)
- Your Portfolio Return Requirement: this is the rate of return necessary in order to generate the income you need during retirement and to ultimately transfer your wealth to the next generation, all while keeping pace with inflation.
As such, we manage our model portfolios with these two objectives in mind. Additionally, we manage your portfolio based on the tax consequences inherent with the type of saving, (qualified (IRAs) and non-qualified (Brokerage-Taxable)).
Once we establish the portfolio objectives, we select the right asset allocation model. Our goal in managing your portfolio is to help manage the risks intrinsic in investing.
The process has four parts:
We determine how much wealth you must accumulate to satisfy your long-term cash flow needs during retirement by conducting a retirement plan projection. The return you require from your portfolio is determined by evaluating the existing portfolio's value, inflation, the age of retirement, and how much income you will need to maintain or enhance your current standard of living. Once we have made this assessment, we can determine how to allocate the assets among four classes; stocks, bonds, REITs, and cash. Diversification does not ensure a profit or protect against a loss in declining markets.