Make Every Dollar Count

Welcome to this week's edition of The Weekly Trail Report, where we share,

1 Story, where real stories of architects and engineers meet tailored financial strategies,

1 Actionable Tip, to provide actionable insights and guide you towards financial success,

1 Financial Term, to demystify key concepts and empower your decisions.

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1. Story: Tim Makes Every Dollar Count

Meet Tim, a seasoned structural engineer who after years of working had saved up a sizable nest egg. Seeing those big numbers in his bank account got him thinking harder about if he was doing all the right things.

He knew that small changes could mean big differences in the long run, so Tim reached out with a question:

“Am I making the most of my hard earned money?”

To help him find the answer, I dove into Tim’s financial documents:

• Pay stubs
• Bank statements
• Retirement statements
• Loan statements
• Benefits descriptions
• Taxes
• Insurance statements
• Estate documents
• Etc.

As I combed through the details, a few things became clear:

1. No high yield savings - Tim’s savings account was paying a measly 0.1%. That could easily be increased to 4% with a simple phone call.
2. Multiple 401ks - Over the years as Tim’s career had progressed, he had moved employers but had never rolled over his 401k accounts. This left him with many accounts and an inconsistent investment strategy. We could consolidate his accounts to make it easier to track what was going on.
3. Inconsistent Investments - Due to the nature of having multiple investment accounts, Tim’s overall portfolio strategy was a bit of a mess. After consolidating accounts, we were able to implement a holistic investment strategy for his portfolio.
4. Tax Optimization - With money spread all over, Tim wasn’t fully utilizing the different account tax advantages. Having accrued most of his nest egg in traditional retirement accounts, it was time to start thinking about how we could convert some of that into a Roth to minimize taxes over the long term.

After making these changes, Tim felt the peace of mind knowing that he wasn’t leaving money on the table. With a personalized, holistic strategy, he could feel confident that his hard earned money was going the furthest and he was on track to achieve his goals.

2. Actionable Tip: Optimize Your Accounts

Over time it is easy for your money to end up spread all over the place. To some extent, this is a good thing—every account should have its own goal and optimization.?

That being said, it is easy for things to start doubling up and there be overlap between your different accounts.

Every so often it is good to reassess all of your accounts and see if you can:?

1. Consolidate: Streamline accounts to align with specific goals

1. Optimize: Ensure each account optimally serves its purpose

1. Tax Efficiency: Review if investments align with tax-efficient strategies

1. Seek Better Options: Continuously explore better investment options (fees, performance, etc.)

Take some time to assess your accounts.?

Are you fully optimized?

3. Financial Term: Asset Allocation

Asset allocation is like building a diverse team for your financial game plan. It's all about spreading your investments across different categories - stocks, bonds, real estate, and cash - to lower risk while aiming for solid returns.?

Just as a coach selects players with different strengths, asset allocation helps you create a balanced portfolio based on your goals and how much risk you're comfortable with.?

It's the playbook that keeps your finances on track, no matter what the market throws your way.

Happy Trails,

Ryan

Disclaimer: We employ fictional characters to illustrate financial concepts faced by individuals in the architecture and engineering industry. Any resemblance to real persons, living or dead, is coincidental. While the stories are inspired by our experiences, the specific details, circumstances, and outcomes mentioned are entirely fictional and created for educational purposes only. Real client information is strictly confidential and never disclosed without explicit consent. Our aim is to provide relatable examples for educational purposes, respecting the privacy and confidentiality of our clients.