Hi and thank you for stopping by today. Today I’m going to talk about financial planning for high net worth clientele.
My name is Tina Anders and I am the Fee Only Certified Financial Planner for my wealth management firm here in Petaluma, California, Anders Wealth Management, serving primarily clients in Sonoma and Marin and Napa counties.
Again, thank you for stopping by. Financial planning for high net worth clientele. While some clientele may need to think about and consider and plan for paying off student loans, saving for retirement, buying or refinancing a home, things of that nature – very important. High net worth clientele oftentimes, think about things like estate planning, how to plan for the wealth of future generations, how to avoid paying more tax and absolutely necessary. A financial plan can help deal with all of those issues.
A financial plan is a comprehensive breakdown of your goals, but also how to make them happen. The methodology to which you can achieve your goals. Your financial goals, the makeup of your investment portfolio, your age, even where you live, and your lifestyle choices play a part in making your financial situation, excuse me, situation unique.
On top of those, high net worth individuals are even further in a category of their own. Having more wealth than the average person means you’ll fall into a different tax bracket. And you’ll have to consider additional types of tax like capital gains tax. A unique situation requires a unique approach. Financial plans are especially important for the extra wealthy and so is finding the right Fee Only Certified Financial Planner.
For individuals with particularly high net worth proper tax planning is even more important. Without intelligent tax strategies, you run the risk of missing out on crucial tax benefits, which can mean paying much more than you need to. Most especially, wealthy people benefit from capital gains. And the associated tax is something you’re probably familiar with. It’s the tax imposed on earnings made from investments. One thing that’s good to be aware of is the different ways the tax applies to short term gains, and long term gains. If you have holdings that you need to take out, before you’ve held them for at least a year, you’re going to be taxed or the earnings, you’re going to be taxed at ordinary income tax rates. Which are generally speaking quite high for high net worth clientele. If you are able and willing to hold your investments for at least a year if not longer, when you go about taxation, when you pull those assets out, you will only have to pay long term capital gains rates. Which are typically 15 to 20%. Quite a bit lower than your ordinary tax rates. Now, these tax rates do not apply to individual retirement accounts such as traditional IRAs, Roth IRAs, employer sponsored plans, things of that nature. But for taxable accounts, very important information.
Good tax planning involves planning accordingly to these two different classes of capital gains – important. The tax cuts and JOBS Act passed by the Trump administration meant quite a few changes to the tax code. Many of which have a significant impact on high net worth individuals. One of the things that changed is the exclusion limit on gift and estate taxes. The exclusion limit has doubled since 2017, meaning you can leave more money to others while getting your tax break when you pre decease them. Taking advantage of this change is just one way you can make tax planning work for you.
The fundamental approach to a strong investment portfolio doesn’t change much with a net worth of you the investor. You need to take into account your financial goals, your risk tolerance, your time horizons. Then you need to remember to strive for diversifying in every step of the way. High net worth individuals tend to have goals that could be directed toward a state planning and providing wealth for future generations also avoiding paying taxes beyond what you’re required to pay. Investing in any capacity involves some risk, how much risk you’re comfortable with is up to you. Of course, keep in mind that the risk return trade optics dictates that higher risk brings higher returns. I am known for being a conservative, yet also assertive investor for my clients.
Thank you for stopping in today. I do appreciate it. If you are a high net worth individual, please find a Fee Only Certified Financial Planner. Tina Anders, Anders Wealth Management here in California. Happy to take care of you. If you have comments about this video or questions of any kind, please comment below and I will address them. If you’d like a topic on a video, let me know I will do that as well. Tina Anders again, in your corner. Thank you
Hello and thank you for stopping by today we are going to talk about pointers for high net worth investors.
My name is Tina Anders. I am the Fee Only fiduciary Certified Financial Planner for my firm located here in Petaluma, California, Anders wealth management. Serving primarily Napa, Marin and Sonoma counties. I am going to talk about pointers for high net worth investors, again thanks for stopping by.
So, keep saving, don’t spend all of your investment returns. You know this. Save wisely and invest wisely. You can focus on increasing your cash inflows, as well as reducing your cash outflows, thus increasing your overall wealth. While you, as a high net worth investor, may not think of yourself as a saver or someone that needs to save, you know that living below your means will allow you to achieve and maintain your desired level of wealth in a shorter amount of time.
Point number two, invest not only in United States but also in the European Union and also emerging markets. Developed countries, such as the United States and the European Union are thought to offer the most investment security, but look beyond your borders to frontier and emerging markets. Some of the top countries that the ultra wealthy are investing in are Singapore, Chile and Indonesia. Of course individual high net worth clientele, you need to do your research to make sure that these countries (or let me do it) to make sure these countries fit into your overall investment strategy and your portfolio.
Pointer number three, don’t worry about keeping up with the Joneses. Now, I know you know this cognitively but do you really know it? Many smaller investors are looking at what their peers are doing. And they try to match or beat their investment strategies. However, not getting caught up in this type of competition is critical to building personal wealth. You, a high net worth investor, know this and you should establish personal investment goals and long term investment strategies before making decisions about your investments. High net worth investors envision where they want to be in 10 years 20 years and beyond especially considering their errors. You need to adhere to an investment strategy that will get you there. Instead of trying to chase the competition or becoming frightened of the inevitable, the inevitable economic downturn, stay the course with a strong, stable portfolio.
Next pointer, have your portfolio designed for a reliable stream of income, stability, and growth. I want to just make a note here, annuities are not necessarily the best way to do this. Although a lot of people turn to annuities for reliable streams of income. There are ways to structure your portfolio for long term growth while providing a reliable and predictable income stream each year. I do this for my clients all the time. I have structured portfolios to 2008; not one client had to adjust their lifestyle. I have structured portfolios to deal with the current Covid situation. Clients are not having to adjust their lifestyle. There are ways of structuring portfolios to provide reliable and predictable income each year, no matter what’s going on in the markets.
Next pointer, rebalance your portfolio. What does that mean? I’ve talked about it in another video and I want to just cap on it right here. So, rebalancing, if you have a portfolio that is say 50% bonds and 50% stocks. Well, if stocks go up, that means the value of the stocks is higher now than 50% of the portfolio. So, you might be sitting at a 60% stocks, 40% bonds, or even more extreme than that. So, you want to rebalance back to your 50/50 if in fact, that’s your allocation. Rebalancing regularly is very important for your portfolio and for your long term stream of income and your long term wealth. You want to remain diversified, adequately diversified. You want to remain properly diversified. Even if some investors have specific allocation goals. These are high net worth people as well as not high net worth people. They often don’t keep to the rebalancing and they allow their portfolios to skew too far one way or the other. So, rebalancing is very important. A balanced portfolio typically includes the right mix of cash, stocks and bonds based on your age, your risk tolerance, your comfort zone and other factors that we would consider and that you need to consider when allocating your portfolio. For the ultra wealthy rebalancing is a necessity.
Work with a fee only fiduciary Certified Financial Planner to help you achieve your goals by staying on track.
Thank you for stopping by today. If you have comments, please do so below, including comments about the video, comments about questions that you might have for me, and or topics of interest for future videos. Happy to accommodate you. Tina Anders Anderswealth.com. Thanks again for stopping by, in your corner always.
Hi there and thank you for stopping by today. We are going to talk about year end financial planning.
My name is Tina Anders. I am the Fee Only Certified Financial Planner for my wealth management firm in Petaluma, California, Anders wealth management, serving primarily Sonoma and Marin counties. Thank you again for stopping by.
So, let’s talk about year end financial planning. One thing you can do check your flexible spending account balance. If your employer plan does not allow you to roll the money over to the next year, make sure you spend the balance on qualified expenses, so you don’t lose out on that money.
Another thing you can look at, make a qualified charitable distribution from your IRA. See my video on that particular topic. If you make a QCD, qualified charitable distribution, from your IRA you may reduce the amount of tax that you owe on your IRA distribution.
Third thing prepay your charitable gifts. Thinking ahead about next year’s charitable gifts may allow for a larger tax deduction this year if you donate this year. So, prepay if you can, and you want to.
Number four review your employer sponsored retirement plan and IRA contributions. Maximizing the amount you contribute takes advantage of available tax deductions and employer matching contributions.
Five, consider a Roth conversion. Check out my video on this topic. If you’re unable to contribute to a Roth IRA directly because you don’t qualify, you might benefit from contributing to a traditional IRA and then converting the funds to a Roth IRA.
Number six harvest your tax losses. See my video on tax loss harvesting. If you have losing stock positions, and that’s quite possible this year 2020. Consider selling them to offset some of your gains and reduce your taxable income.
Number seven, plan for life events. A job change, a new home, a car purchase, surgery or any other life event requires financial planning ahead, if possible. So, think about that.
Number eight review your estate plan. Ensure your overall estate plan including your will, your trust, your powers of attorney, advanced directives are all current and reflect your current wishes.
Number nine review your insurance policies. Review your home insurance policy, your auto, your umbrella, your flood, your earthquake, your long term care, your life and other insurance policies to determine if you have enough coverage, and if you have the correct terms reflecting your desires.
Number ten review your beneficiaries. Double check that changes or updates are not needed on your accounts and I will highlight especially for people who are divorced. Sometimes, people mistakenly leave ex, former spouses, on their beneficiary list. So, consider that.
Number eleven, and most importantly, as the year comes to a close checking with your financial professional to ensure that everything’s in order with your overall financial situation. Again, a fee only certified financial planner is an excellent bet.
Thank you for listening. If you have comments or questions or topics you’d like to see me cover in a future video please comment below. I will be happy to respond. Tina Anders, Anders wealth management in your corner. Thank you very much for stopping in today.
Hi there and thank you for stopping by. Today we are going to talk about the millionaire tax. I am Tina Anders, Fee Only Certified Financial Planner for my firm here in Petaluma, California serving primarily Sonoma and Marin counties. Here to talk to you about the millionaire tax.
New Jersey announced a plan to raise income taxes for every dollar earned between $1 million dollars and $5 million to fight financial realities of COVID-19. Some people are calling this the millionaire tax. The wealth tax on its millionaires will be in an effort to fight the financial realities exacerbated by the ongoing COVID-19 pandemic. And it could be finalized as soon as this month, October 2020.
It’s estimated that the tax increase could bring in $390 million in revenue just in the fiscal year of 2021. This begs the question, “will wealthy residents leave to avoid the millionaire tax?” While some lawmakers say that tax will undo years of tax inequities and help make up for shortfalls that are caused by the pandemic. Others say it will cause wealthy residents to leave the state.
New York legislators are floating something similar. But New York Governor Andrew Cuomo opposes the idea with the same concern increasing taxes on the rich to help cover COVID related deficits is difficult if you don’t want to chase away the residents in your state. California is also considering a millionaire tax that would add surcharges to higher income earners and those with high net worth excluding directly held real estate. So, no worries there. In addition, the millionaire tax in New Jersey could disincentivize work from home relocations in addition to chasing away some existing millionaires. Will other states follow suit? We don’t know but it certainly seems possible.
Keep your eye on the news and if you’d like to comment on this video, or you have a topic of particular interest that you’d like to see me do a video in the future, please comment below. Tina Anders Anders Wealth Management in your corner thank you for stopping by.
Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain any original or desired level of asset allocation and or risk. In short, what that means is if you have a portfolio 50% stocks and 50% bonds, and the stocks outperform bonds. Then all of a sudden, you might have 70% in stocks because they’ve grown and then bringing your bond portfolio down to 30%. So, now you have a 70/30 allocation. You want to rebalance it to bring it back to 50/50, which would be in this example, your target or desired allocation.
While there’s no required schedule for rebalancing a portfolio most recommendations are to examine the portfolio the allocations at least once per year. It’s possible to go without rebalancing a portfolio but it’s not advisable at all.
Rebalancing gives investors the opportunity to sell high and buy low thereby taking the gains from the high performing investments and re investing them in areas that have not yet experienced such notable growth. Rebalancing is a very good idea. It shouldn’t be done at least once per year. I highly recommend it.
And if you have more questions or comments, please do so below if there’s a topic on which you would like me to do a video, please also let me know. Thank you again for stopping by, Tina Anders, Anders wealth management in your corner always.
Hi there, and thank you for stopping by today. Today we’re going to talk about diversifying a portfolio and the importance of doing so. My name is Tina Anders and I am the fee only Certified Financial Planner for my firm here in Petaluma, California, serving primarily counties of Sonoma and Marin. Thank you again for stopping by.
So, let’s talk about diversifying a portfolio and why it’s important. Diversification of a portfolio is really just spreading your risk across different types of investments. The goal being to increase your odds of investment success. It’s important in investing because markets can be volatile and unpredictable. Think about COVID volatility, think about 2008. Diversification is very Important.
So, what is diversification? Diversification is holding investments which were will react differently to the same market or economic events. So, for instance, when the economy is growing stocks tend to do well. They outperform bonds typically, but when stocks slow down bonds often perform better than stocks. So, when you hold both stocks and bonds, you reduce the chance of your portfolio taking a big hit when markets are volatile. Again, think COVID, think 2008.
What are the benefits of diversification? You are able to minimize the risk of loss to your overall portfolio. You are able to expose yourself to more opportunities for returns and you’re able to safeguard yourself against adverse market cycles. And of course, you’re able to reduce performance volatility. Which I don’t know about you, but when it comes to financial peace of mind, I know it’s important to be diversified.
So how do you diversify your portfolio? Well, there are several ways to do so. But the same rule always applies. Each investment in your portfolio should serve a different function. For instance, for stock diversification, you may have an S&P 500 index fund for exposure to the United States large cap stock market. And you should could also have another investment focused on small cap stocks. You’d also want domestic companies and international companies because you want to take advantage of all the growth out there.
Now for your bond portfolio. It should be similarly diversified across long term, short term bonds. Corporate sovereign debt and of course high quality bonds to help reduce your volatility risks.
So, I tell my clients that diversification is of the utmost importance when it comes to building a high quality portfolio built for market gains and wealth preservation.
If you have comments, questions or a topic on which you would like me to do a video, please comment below and I will do my very best to accommodate you. Thank you again for stopping by today. Tina Anders fee only Certified Financial Planner in your corner.