There is pride in having contributed to a client's financial success and there are many different reasons that might bring a client to make that initial call to Buttonwood. The list below is just the tip of the iceberg when it comes to stressful events in life that can be a sign that it may be time to call on a professional.
Buttonwood clients receive advice and attention on a personal level developing and executing financial strategies designed to not only provide a solid financial foundation throughout life, but to be able to make it through stressful financial times - and emerge with a positive outcome.
Are you currently experiencing any of the following events in your life? If so let's Get Started looking for the best solution to get your financial life in order!
Warren & Agnes saved and invested throughout their working years so their retirement would have a sound financial base. However, with the low return available on savings and the challenge of finding investments that would provide current income, they were concerned. In this environment, would their savings and investments be adequate to fund their immediate needs and provide for the many expected years of retirement?
They had planned their spending based on interest and dividends not touching their principal. They were finding they needed to increase risk of their investments to get the necessary cash flows. Concerned with wildly varying income and having difficulty finding good investment options, Warren & Agnes sat down with the Buttonwood Team to review their options.
During our meeting, the conversation changed from "How do we get enough income for immediate needs as well as the future?" to "Here are options for positioning your savings and investments designed to smooth cash flows, reduce risk and allow you to live through both the ups and downs of our economy."
What changed? The Buttonwood Team was able to assist Warren & Agnes to determine their specific spending needs and set aside, in very safe investments, assets to meet these needs. Their remaining cash and investments were re-positioned into a well-diversified, conservative growth and income strategy designed to continually replenish their safe cash flow assets.
For Warren & Agnes the end result was a smooth and consistent income stream designed to last throughout their lifetimes. They no longer had to worry about when specific dividend and interest payments were made from investments. At the same time, they were able to reduce risk and increase diversification to take advantage of higher potential returns that could ultimately benefit their kids and grandkids.
If, like Warren and Agnes, you would like to worry less about your retirement cash flows please contact Vince Pastorino to set a strategy appointment at 816-285-9000.
At the time, simplifying his $5 million investment portfolio into a few index funds appeared to be a winner. Ed's choice was driven by the fact that he was driven himself. A successful entrepreneur with multiple projects underway at all times, wading through statements and tracking his returns was not his idea of time well spent.
Then the market corrected in 2008 and the S&P 500 fell 37% the second worst year since 1926 leaving Ed with big losses. Ed realized as he approached the time when he would need to rely on investments for income, his desire for simplification might not provide the protection needed. Knowing he couldn't afford another down cycle with the same results, he approached the Buttonwood Team looking for a solution that would lessen the impact of future market declines. Ed realized that return of his money can be just as important as the return on his money.
The solution was simple; it was time to go the opposite direction with his investments. Diversification would reduce the ups and downs, lessening his exposure to the downside. The difference would be Buttonwood acting as his Family CFO and handling the everyday tasks involved with maintaining his investments, coordinating cash flows, tax, insurance and estate strategy. To make sure we remain on track, we meet with Ed regularly to review results and surface additional concerns he might have.
If you would like to worry less about your financial life please contact Frank Drinkwine to set a strategy appointment at 816-285-9000.
Mike and his wife, Lori, wanted to retire in 10 years. But they had one big question: Would their current investments give them enough to fund the active retirement lifestyle they dreamed of—one that involved travel, hobbies and more?
Mike and Lori had reason to be worried. The 2008 market correction, which had delivered a big hit to the couple's overall financial portfolio, weighed especially heavy on Lori's mind. While their investment accounts had gradually regained their value, she was very concerned that a similar occurrence before or during retirement could disrupt their plans. At the same time, Mike was afraid they hadn't saved enough, and he wanted to invest more aggressively to make up the perceived shortfall. The one thing they agreed on was that they needed help, so they set up a meeting with the team at Buttonwood.
An Investment Strategy That Made Everyone Happy
After our initial consultation with Mike and Lori, the challenge for the Buttonwood team was clear. We needed to address both Mike's and Lori's concerns and quantify them into an overall investment strategy that made each of them happy. After a couple of intense but productive strategy meetings, we understood what Mike and Lori wanted their retirement lifestyle to look like. At that point, it simply became a matter of implementing a combined cash flow, tax, insurance and investment strategy, all fine-tuned to their goals and attitude toward risk.
In this case, the couple felt it was important to provide both safety and growth during the 10-year window until retirement, as well as through their post-retirement years. While it may seem these are conflicting goals, the Buttonwood team recommended a strategy that would allow them to do just that: We call it the bucket approach.
The Bucket Approach
The first bucket would contain "safe" investments, such as money market funds, certificates of deposit and short-term bonds. Upon retirement, this bucket would provide the cash flow for daily expenses. The subsequent buckets would contain investments, beginning with those that were more conservative, such as bonds, and then moving to higher-risk categories, such as dividend-paying stocks, growth stocks and alternative investments. This strategy allowed us to control the overall risk by the amount of assets in each bucket. Risk could also be adjusted as milestones, such as retirement, became a reality.
Because Mike and Lori had a decade until retirement and their current cash flow was adequate, we de-emphasized the first bucket and allocated more of their investments to the other buckets. As they get closer to retirement, we will load up the first bucket by shifting some of their higher-risk investments into more conservative options.
In Buttonwood's role as Family CFO, we find that this bucket approach works very well for many of our clients. It's a valuable tool in not only managing cash flow and investments, but playing a role in tax and estate planning strategy too.
If you would like to discuss how our bucket strategy might benefit you, give us a call at 816-285-9000. We'd be happy to sit down for an introductory meeting and review how such an approach could be used to help you reach your financial goals.
Twenty years ago, Richard and his wife, Edith, started a small business. The couple poured their heart and soul into their company, eventually growing it to more than 50 employees. They loved the successes and challenges that came with being business owners, but when a friendly group expressed an interest in buying the company for several million dollars, it was simply too good an offer to pass up. After decades of hard work, the couple thought that spending some quality time having fun and actually living life outside of their business sounded pretty darn good!
Millions in the Bank, But Still Feeling Stressed
After selling their business, Richard and Edith had millions in the bank—a dream come true for most people. But they realized they had a problem: While they may have been very good at running a business, they didn't have a clue when it came to investing and managing their life savings. They needed to get help, and soon. But how could they find someone whom they could trust with their money?
Friends recommended they check out Buttonwood Financial Group, so they made an appointment. Richard and Edith arrived in our office for their introductory meeting with what seemed like a simple request: Income for life, please! We set about turning that request into reality.
Our first step was to schedule a few meetings with Richard and Edith, where we talked with them in detail about their values, hopes and dreams. It took some time, but we wanted to be absolutely sure that we understood their full financial picture. Ultimately, we discovered that they had done a great job of planning. But they had skipped a crucial step: They hadn't actually implemented their plan. They had created trusts but not funded them. They had powers of attorney in place for health care decisions, but not financial ones. And so on.
Putting a Plan in Place
Once we understood Richard and Edith's situation, our team went to work. We coordinated updates to their estate planning documents, opened and funded trust accounts and promptly consolidated assets from over 20 different bank and investment accounts into just four trust accounts. Our efforts had immediate positive results: Just by consolidating accounts, we were able to simplify tax preparation and cut the couple's annual tax bill by more than 50%.
To eliminate concerns about big tax draws as quarterly estimated taxes came due, we met with Richard and Edith's CPA and established a "tax account." Then, we set in motion a process so that the money to pay upcoming tax bills was automatically deposited into the tax account and quarterly estimated taxes were paid on their behalf.
Last but not least, we mapped out an income strategy that would allow for Richard and Edith's assets to grow while also providing them a monthly income. Their lives were simplified and they no longer had to spend time every day reviewing bills, bank account information and other financial details.
The first thing Richard and Edith did after we finalized their plan? They took a much-deserved round-the-world cruise. One day, we received a postcard in the mail from one of their ports of call. The message thanked us warmly for helping to make their trip of a lifetime possible.
We help dreams come true for clients like Richard and Edith every day. Want to learn more about how we can help you? Contact us for an introductory appointment today.
Carol is a widow. Her husband, Dwight, had been the primary earner in the family before he passed away two years ago. They had made a great team and shared much of their life together. However, Dwight had always handled most of the investment decisions.
Dwight did a great job of dotting the i's and crossing the t's and when he passed away everything went just as Dwight had planned and Carol was able to work through the estate settlement process with little trouble.
Now, a couple years later, statements kept showing up at the house, bonds were being called, cash was building up, and so many of the newsletters and magazines that made perfect sense to Dwight seemed like jibberish to Carol. After receiving a referral from a good friend, Carol was introduced to the team at Buttonwood Financial Group.
We met at Carol?s house and spent several hours reviewing what turned out to be more than a two foot high stack of investment statements that had built up. What Carol needed was a good, old-fashioned spring cleaning and that was exactly where we started.
Once we boxed up the statements and got them back to the office we were able to implement Buttonwood Wealth Management Solutions (BWMS) software so all of Carol's investments, bank accounts, CD's, insurance and estate program were accessible in one location - at any time. There were over fifty-eight different investment accounts, which ranged from assets at brokerage firms to stocks held in dividend reinvestment directly with the companies.
In the weeks that followed we were able to establish two trust accounts and two IRA accounts for all the assets to transfer into. With assets consolidated, we were able to establish a regular withdrawal strategy to create a steady and consistent income for Carol.
Excess cash from called bonds was reinvested, the hassle from piles of statements was eliminated and Carol went from spending time daily trying to track her investments to finding time to travel and be with her grandchildren.
George called us after being referred by his close friend. He was turning sixty-five years old and had worked in the real estate market his whole life. He was comfortable in that arena and his rental homes had treated him right over the years.
George's challenge was that his current rental homes were taking an enormous amount of his time. He used to enjoy painting and cleaning the different properties, but what used to be a pleasant escape had become a burden. It was no longer so easy to climb underneath the sink to fix a faucet, and the seemingly never-ending painting took away from his time on the golf course.
His goal was to simplify. He had enough assets to be financially comfortable for years if he could find away to create the cash flows that he needed without the work that went with the real estate he currently owned.
After reviewing some options to reduce the taxes he would incur when he sold his various properties, we put a program in place that would create liquidity over the next three years. We worked with 1031 opportunities to defer taxes, diversify part of his real estate portfolio, and create additional cash flows. We were also able to utilize proceeds from select sales of real estate and reinvest in a well diversified cash flow generating portfolio.
The low tax rates George had enjoyed due to the depreciation of the real estate were maintained by the appropriate use of both tax-free and taxable bonds in his account. A monthly check was deposited directly into his checking account, and the work that had become such a burden with the individual real estate properties was no more.
Michelle was the classic financial success story. She had worked hard and built a great career as a lawyer, eventually rising to become a partner in her firm. Along the way, she'd saved and invested consistently while also keeping her cost of living in check. Michelle was also very fortunate to receive a large inheritance. But despite all her wealth, she felt something was missing.
A Desire to Make a Difference
While Michelle, who was unmarried and had no children, felt blessed by her good fortune, she also felt that she wanted to do something meaningful with her wealth. In her current estate plan, she had listed her three nieces and nephews as her beneficiaries. While she had mentioned to them that she'd recognized them in her will, none of them expected to receive an inheritance as large as the one she planned to leave them. At the same time, Michelle was passionate about a few causes, especially education, and wanted to do something to support nonprofit organizations that were working in that area. But she wasn't sure the best way to go about doing that.
Michelle thought getting some objective advice about her legacy and estate planning goals was a good idea, so she set up a meeting with members of the Buttonwood team. She explained her situation, and we came back with a proposal that she establish a private foundation. Michelle loved the idea, and after carefully reviewing what that would entail (as well as her other options), she decided the foundation idea truly met with her overall beliefs. By establishing her own private foundation, she would be able to leave a lasting legacy in her community while at the same time still sharing a more manageable, smaller inheritance with the people she truly loved.
One Year Later
Fast-forward a year: Michelle was so excited about the prospect of giving back some of her wealth to the community that she decided she wanted to start the foundation while she was still alive. That would allow her to see and feel the impact that her efforts and money were having in the community. Fortunately, we had built some flexibility into her initial plan, so making these modifications and setting up her foundation was a fairly straightforward process.
Today, Michelle spends much of her free time reviewing grant applications and deciding how to best allocate her foundation's funds. Meanwhile, the Buttonwood team takes care of coordinating the tax and asset management and other day-to-day needs of Michelle's financial life.
Are you interested in leaving a lasting legacy for your heirs and your community? Schedule a meeting with us and we can discuss how to make philanthropy part of your long-term financial plan.
Every year it becomes more difficult to keep track of all the different investments we have. There has to be a better way?
Ken & Patricia are extremely good savers! Among their investment assets where more than $800,000 invested in at least 20 different stock dividend reinvestment plans. In these plans, they held some of their own stock certificates and other stock certificates were held directly with transfer agents.
Their investment strategy had worked well. Assets had grown, cash flows were reinvested and life was looking good. The big problem was the paperwork, Ken & Patricia were overwhelmed with all of the corporate spin-offs, stock splits, mergers, name changes, and 1099?s that had to be collected at the end of each year for tax calculations. Inevitably, it seemed that at least one or two of those would get lost every year.
Keeping track of the cost basis for all the stocks was also becoming a problem. With the splits and distributions the number of accounts they had multiplied rapidly and they were having a hard time keeping up with it all. That was when the phone call to Buttonwood was made.
After establishing one single account for Ken & Patricia, the Buttonwood team went to work. The stock held at the transfer agents, located in the safety deposit boxes, found in drawers at the house, etc. was deposited into their new investment account. By tax time, the following year, Ken and Patricia received a single 1099 for all of the different stock positions that they held.
It took some serious effort, but once all of the cost basis was determined, it now showed up and was calculated automatically for them on their monthly statement. Taxes were a breeze and life had become simple once again.
I've made it to 60 and can retire now look at all these decisions!
Ron was turning 60 and it was time to retire! Fishing trips, vacations to visit the kids, and doing some part time consulting were all finally going to become a reality. So Ron began to work on some cash flow calculations based upon the information provided to him from his previous employers.
One of the jobs that Ron held was with the State of Missouri so there was a pension plan. At another position he had earlier in life, Ron had a 401(k) plan. Ron also had an IRA, CD's and regular investments. As he begin to look at the different cash flow alternatives, the options became more and more intimidating.
Should he take the annuity from the State and play it safe? Should he cash in the State plan and allow the money to grow as he didn't need it right away? Should he take cash flow he needed today from his 401(k) or from the State retirement plan? How much would he need? What could he take out without causing big tax problems or depleting his assets??
This was when a friend of his directed him to contact The Buttonwood Team. Ron came to the Buttonwood offices with a big pile of paper and more than 100 questions he had written down on the yellow notebook tablet. We started with question one and statement one and worked our way through.
In the end, Ron implemented a variety of different strategies, taking advantage of the strengths of each one of the retirement plans and investment accounts that he had. Today Ron is enjoying the life he worked so hard to save for over the years and Buttonwood takes care of all the day to day issues surrounding Ron's financial life.
My cash flow in retirement isn't taking me as far as I thought it would. What are my options?
Paul & Betty needed cash flow in their retirement. Or so they thought. When Paul & Betty first came to Buttonwood, the need for cash flow was at center of the discussion. When the question arose, how much money they needed each year, the answer was $70,000. However, an interesting thing occurred, once the Buttonwood team reviewed the tax returns for Paul & Betty...
In the previous 3 years, they made at least $80,000 each year. It turned out Paul and Betty had a cash flow management issue. Paul & Betty had about 10 different accounts, located different brokerage firms. They also held a number of individual stocks and bonds, as well as CD's at a variety of banks.
The Buttonwood team, after helping with some estate planning needs, established trust accounts, consolidated assets from the multiple accounts and individual holdings into these new trust accounts and began to send out a monthly check. The irony of the situation was that once assets were organized and consolidated cash flows were actually able to be increased and now Paul & Betty live comfortably on about $90,000 per year in income.
When interest and dividend checks came in for $100 here or $500 dollars there, the money was simply spent going unrealized. By simply consolidating assets and putting a system for tracking cash flows into place Paul & Betty were able to define their budget, determine expenses, and make their retirement dollars stretch much further than they had been able to do on their own.
Also, you may want to take a minute to explore below how Buttonwood has worked with clients through a number of situations to develop successful outcomes. It is during life events like these that Buttonwood has become an invaluable resource for clients.
|Getting married||Marriage of a son or daughter|
|Birth of a child||Private school education|
|Providing for special needs||Serious injury or illness|
|Facing divorce||Children leaving home|
|Buying a second home||Preparing to retire|
|Reviewing a major investment||Becoming disabled|
|Selling a business or practice||Exercising stock options|
|Caring for parents||Selling a large capital asset|
|Becoming a grandparent||Buying a home for children|
|Dealing with death in family||Achieving financial independence|
|Considering early retirement||Reevaluating charitable giving|
|Receiving a wealth transfer||Children entering college|
|Taking a business public||Instituting a wealth transfer|
|Reevaluating investments||Making a career change|
|Continuing education||Estate Settlement|
|Tax Reduction||Asset Protection|