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Advanced Planning for High-Income Earners/HNW

As a high-income earner, you've likely encountered distinct financial concerns and challenges that differ from those of others. These issues are often coupled with and compounded by the inability to talk to others or ask for advice when they don't understand, can't relate, don't have experience with your challenges.

Especially high earners and High-Net-Worth (HNW) individuals, who make up the core of our client base, tend to have some specific challenges in common.

We understand that these challenges and concerns are real, and we have solutions to address them.

Explore more about some of the solutions we consult on and our process and approach.

  • Minimizing tax burden/Need for tax-management strategies:
    • Generally subject to higher tax rates or have more complex tax situations due to investments, business ownership, or other sources of income.
    • Have savings amounts that far-exceed annual limits on the most common tax advantaged vehicles.
    • Need to balance tax management across all relevant time periods against keeping properly diversified exposure to asset classes.
  • More investable assets: both a blessing and a curse.
    • With increased complexity, many come to us unaware of or struggling with inefficiency and duplication. All holdings should serve a purpose, and many holdings may serve the same purpose in different parts of your portfolio, which requires oversight to avoid overlap, unplanned redundancy, and unintended holistic portfolio allocations across accounts.
    • Many worry intensely about making the right investment decisions, managing risk, and keeping up with market trends, in part due to the inherently larger stakes.
    • Many high earners (especially financial professionals!) don't just want to be in stocks once assets really start to accumulate. We understand and can provide access to alternative diversification options like structured notes, private equity, hedge funds, real assets, and purely uncorrelated assets to suit your specific risk/reward and liquidity profile.
    • Equity-based awards and other less common compensation structures call for more creative strategy solutions and advanced planning. Many wind up needing to manage risk surrounding concentrated equity/stock positions from compensation or long-term holding.
    • Access to private opportunities: while more opportunity may seem like an advantage, it can also quickly turn into complexity and disorganization. It can be extremely difficult to assess where non-traditional investments and business interests fit within a holistic financial picture.
  • Managing Variable Income & Liquidity:
    • Prior emphasis on accumulation eventually leads to a shift to recognizing the value of intelligently ensuring you can keep and use assets more flexibly over time. This includes access to liquidity, risk management, asset protection, tax strategy, and more.
    • Private assets/investments used to diversify and/or non-traditional compensation structure and timing can lead to significant cash flow and liquidity planning complexity.
    • The art and science of intelligently and efficiently getting cash flow onto and off of your balance sheet become critical, especially when variable income and equity compensation come into play.
    • Lifestyle inflation: Many worry about falling into the trap of lifestyle inflation, where spending increases as income rises, making it harder to save for long-term goals like retirement or financial independence.
  • Retirement planning/Early-retirement & financial independence potential:
    • Having the potential to become financially independent and retire before age 65 is exciting, but it comes with different risks and challenges than most traditional planning is prepared to deal with.
    • Even small percentage cash flow differences generated by well-designed, flexible distribution strategies can become massive dollar amounts of recurring annual income in retirement at large asset levels. 
    • Earlier retirement ages bring longer than typical retirement periods. When the high-income earning years stop, many worry about whether their savings will be enough to sustain their lifestyle in retirement, especially if they have grown accustomed to a high-cost lifestyle.
    • Health care costs: High earners may worry about their hard-earned assets eroding due to the rising cost of health care and long-term care over time, especially as they age.
  • Asset Protection & Estate Planning:
    • Protecting wealth from creditors, liability, and transfer friction can become a major concern.
  • Major Goal and Objective Changes:
    • Shift from feeling need to achieve maximum growth at all costs to protecting and effectively using what's already being earned.
    • Shift from needing to maximize risk and rate of return in order to have a chance at retiring comfortably to achieving more predictable growth and results.
    • Shift from limited opportunities to advanced strategy, which often includes more complexity worth managing. 
      • More pieces to your financial puzzle and more options means more efficiency and optimization considerations to work out, and most high earners are too busy with their area of expertise to justify dedicating the time required to keep up with all of the nuances.  
      • Holistic financial planning accounts for retirement/distribution planning, tax strategies, estate planning, risk management, cash flow & liquidity management, insurance, investments, business ownership, and more. 

High earners often have more complex financial planning needs, and our holistic advisory team has a vast array of tools and resources available to help you navigate these challenges and make informed financial decisions.

How would you feel if you had more guidance on the following?

  • Coordinating your financial life: If you are feeling disorganized and overwhelmed by the many parts of your financial life, we can help you bring order to the chaos. This may involve creating a comprehensive financial plan that takes into account all aspects of your financial situation, including investments, taxes, estate planning, insurance, and more. I can also help you coordinate with other financial professionals, such as accountants and attorneys, to ensure that your financial plan is well-integrated and effective.
  • Managing sudden or bulk increases in income: If you suddenly find yourself earning more than in the past, or have seen an uptick in your variable income, we can help you create a plan to manage your newfound cash flow increase to ensure that you are making the most of your opportunities and protecting what you've already worked hard for. This may include understanding your cash flow, creating a savings plan, and understanding the diversification and protection of your growing assets.
  • Evaluating opportunities: As a high-income earner, you might feel inundated with investment opportunities that may not be suitable for your goals and risk tolerance. We can help you evaluate where these kinds of opportunities fit within the context of your entire plan, and we can help you understand the risks and other considerations that come along with them.
  • Planning for the future: If you are uncertain how long your current earnings trajectory or uptick in variable income will last, we can help you create a financial plan that is designed to meet your long-term goals, regardless of what the future holds. This may include developing a diversified and partially uncorrelated investment portfolio, creating a cash flow management plan, and implementing tax-efficient strategies.

For some, high-income-earning capacity comes about more suddenly or recently, and it often doesn't come with a personal or professional background that helps them to prepare. As a wealth advisor who's also been in those shoes, our advanced planning specialist is uncommonly positioned to help you navigate many of the challenges that come with sudden changes in income and financial circumstances.

Overall, our goal as a holistic wealth advisory practice is to help you navigate these waters, and to create a comprehensive financial plan that is designed to meet your unique needs and goals. If you are facing any of the challenges discussed here, please don't hesitate to contact us for a consultation.

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