STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
We’re about to reveal six ways we do that. But first, some terminology. “Saving” money means that you retain more of what’s yours by avoiding unnecessary losses. “Finding” money means you make more money than you otherwise would have.
Table of Contents
- 6 Ways We Can Save/Find You $100,000 for Every $10 Million Under Our Management
- 1. Slash Pointless Fees You’re Paying Now
- 2. Reduce Your Capital Gains Tax Burden
- 3. Reduce Your Risk Exposure
- Foundation 1. Use Historical Data Going Back 100 Years
- Foundation 2. Test Your Portfolio against 1000 High-Stress Scenarios
- Foundation 3. Re-Run the Simulations Every Quarter
- 4. Smart Tax Planning for High Net Worth Retirees
- 5. Plan Your Major Distributions in Advance
- 6. Smart Use of Trusts to Save More on Taxes
- 7. Estate Planning Trusts for High Net Worth Investors
Here are seven ways we can save and find at least $100,000 for every $10 million under our management.
1. Slash Pointless Fees You’re Paying Now
Most high net worth investors who come to us are paying anywhere from 1.5-2.5% every year in fees and costs. Some of these you are aware of, while others are hidden in the fine print.
For instance, suppose you’re paying a 1.1% fee to invest in a particular equity fund. On top of that, you may also be paying margin interest, bond spread charges, and internal fees charged by your brokerage or advisor. You may also be paying commissions.
The point is, there are many such fees charged by advisors and big banks, and they very often add up to more than 1.5% every year. What if we could cut your total fees down by 0.5%? On $10 million, 0.5% is $50,000. If we can save you 0.5% on fees every year, we’re already halfway to saving and finding you $100,000.
Can we do it? Schedule a free Wealth Management Analysis and get ready to find out.
2. Reduce Your Capital Gains Tax Burden
Just like the unnecessary fees, so many ultra-high net worth investors come to us, not realizing they are paying nearly 40% in taxes on many of their investments in the form of short-term capital gains.
Short-term capital gains are taxed as ordinary income, and are triggered by frequent trading. But if you hold on to your equities for more than a year, your gains become long term capital gains, which are taxed at a much lower rate.
If your current financial advisor or big bank is triggering a lot of short term capital gains on your investments, you are losing huge amounts of money to taxes, needlessly.
If that’s the case, we can help. We pride ourselves on not just making you money and building your wealth, but also saving you on unnecessary fees. To find out how, we encourage you to contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below.
3. Reduce Your Risk Exposure
The coronavirus meltdown has crystallized once again the truth we have consistently declared: Too many investors are over-exposed to high-risk equities.
When a crisis like this happens, they suffer 35%, 45%, sometimes over 55% losses.
But what if you could reduce your risk by half, or better yet to a third? If we were to significantly reduce such losses during a market collapse by avoiding undue risk, then we could possibly have ‘saved’ 50-70% of your losses for you. And by what we’ve been hearing first hand from potential clients we’ve been meeting lately, these figures are in the millions.
Pillar Wealth Management does not seek to maximize your gains at the expense of exposing you to undue risk. When market turmoil happens, your gains just get wiped out, so what was the point?
Instead, we seek to optimize your risk and your performance at the same time. The secret to this lies in the planning and management process we have pioneered for ultra-high net worth investors (more on that in a bit).
We can show you data from the 2008 recession where one of our investment approaches lost far less than the S&P 500 during that tumultuous period, but still gained comparable amounts in the years before and afterward. After ten years, our approach was far ahead because it suffered much smaller losses during the recession.
Isn’t that what everyone wants?
We have had so many high net worth investors come to us with 60%, 80%, and even 90% of their wealth exposed to high-risk equities. As in the 2008 recession, they have lost a ton of money they didn’t need to lose in the last few months. One recent potential investor with over $13 million told us he lost 70% during the great recession.
If it’s too late and you’ve already lost a lot of money, we have good news: It is NOT too late to gain it back more quickly than you will if you stick with your current approach. Now is the time to take action and make the big changes you need to make.
To find out how we can help you re-capture market gains, we encourage you to contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below.
Sidenote: Our Innovative Investment Planning Process
Pillar’s approach to investment planning goes far beyond just about any other wealth management firm.
Our approach centers on three foundations. All three are instrumental to producing the optimized – and 100% customized – outcome you want.
Here are the three foundations:
Foundation 1. Use Historical Data Going Back 100 Years
The coronavirus is only the latest event causing massive upheaval and change in the last 100 years. We’ve also been through wars, depressions, technological change, increased lifespans, globalization, inflationary excess, and much more.
Throughout all these changes, markets and economies have forged ahead, withering and soaring.
Here’s the key: From today’s vantage point, we have performance data from all these periods of history. And we can use that data to measure how portfolios from today would have performed through those times of change.
If you’d like to see how we’d personally apply stock economic history-based simulations for you, we encourage you to contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below. The results are eye-opening.
Foundation 2. Test Your Portfolio against 1000 High-Stress Scenarios
Based in part on the historical performance data from the last 100 years, we have created 1000 unique, high stress scenarios. Some of these mirror history. Others are more extreme, mimicking something such as back to back recessions. We take your portfolio and run it through each of these 1000 stress tests, and see how it performs over its expected lifetime.
Why are stress tests so critical? Because history alone isn’t enough. Most of the time, things proceed in ways few predicted it would. Not long ago, investment “experts” predicted growth in global stocks would outpace U.S. stocks. What were these predictions based on? Nothing but continued trends extrapolated based on the data from that time.
But now that the coronavirus has arrived, how much are those predictions worth? Less than nothing. They are utterly meaningless.
Stress-testing runs your portfolio through rigors unexpected.
We don’t know what’s going to happen. That’s why one of our key foundations relies on running your portfolio through 1000 possible high-stress scenarios. This way, we can measure your financial security confidence in a vast diversity of economic and political environments.
We want to see how your lifestyle and retirement hold up in extreme stress.
Foundation 3. Re-Run the Simulations Every Quarter
Using 100-year historical data to build 1000 stress test scenarios that we can test your portfolio’s performance against is a great approach to creating your financial plan.
But if it stops there, what happens a few years later when your life situation changes in a major way? What if you switch careers, or retire, or have to care for an aging relative? [link to blog 37] What if you sell your business, [link to blog 23] or start a new one? And what if while your life is changing, major world events like the coronavirus cause economic upheaval of the sort we’ve been discussing?
Your portfolio projections will never be fixed in place. All projections fail eventually. We must continually rerun the stress tests and continually adjust and optimize your plan accordingly.
That’s why we rerun your portfolio through all 1000 stress tests every quarter. Your financial plan will never become obsolete.
With these three foundations in place, we are able to create a focused wealth management plan for each client that is 100% customized to their specific life situation and long term goals and dreams. Then, we maintain your long term stability by continually stress-testing and adjusting it.
As long as your portfolio projects to exceed your goals in 750-900 of the high stress scenarios, we consider it to reside in the Comfort Zone. That means you can relax.
This is the most solid, data-backed portfolio planning process you are likely to find.
If you’d like to see how we’d personally run simulations for you, contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below. By the end of the conversation, you’ll understand how important portfolio simulations are to protecting and building your wealth.
Now, back to the six ways high net worth investors can stop losing money.
4. Smart Tax Planning for High Net Worth Retirees
Once you pass age 72 (it used to be 70.5), you are required to take minimum distributions from your retirement accounts, such as IRAs and 401ks. The process is complicated, hard to manage, and potentially costly.
Depending on which state you live in, those costs can be extreme because of the taxes some states charge high income earners.
What can we do about that?
Pillar Wealth Management can help you manage the RMD process such that you can save 50% or more in taxes, depending on which state you live in – every year. One way to do this is to use all or part of your required minimum distributions as gifts instead of income.
If you would like to see how we’d personally help you save on taxes, contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below. For high net worth investors withdrawing six or seven figures per year from their RMDs, reducing your taxes by 50% will save you tens of thousands per year or more.
5. Plan Your Major Distributions in Advance
How much money you’ll have ten years from now depends on how much you make and how much you spend in the nine intervening years. Even for ultra-high net worth investors this holds true. There are people at every income level living beyond their means.
But you can plan ahead for major purchases you know are coming. This could be things for yourself, such as a yacht, an additional vacation residence, an island, a new business. Large expenses can also be planned for others, such as cars for kids or grandkids, college tuition, and weddings.
You can also plan for major expenses you don’t know are coming, such as surprise medical events for you or family members, surprise legal expenses, or unexpected business losses (like if you owned businesses forced to shut down during the coronavirus lockdown).
Building expenses such as these into your long term wealth management plan helps you stay strong and continue growing in wealth and financial serenity, no matter what comes your way.
6. Smart Use of Trusts to Save More on Taxes
Certain trusts, such as charitable remainder trusts and irrevocable trusts, can save ultra-high net worth retirees millions of dollars in taxes – including estate taxes, capital gains, and income taxes.
Every trust is complicated to set up and requires help from a team of experts. But for most high net worth families, the money you will save once you put these tools to work will dwarf whatever it costs to set them up.
The worst thing to do is to wait, put it off, and figure that you have lots of time to get around to that. Not that we want to keep referring to the coronavirus, but some people who didn’t expect it found themselves suddenly near the end of their lives.
Kicking the estate planning can down the road is one of the worst decisions you can make, and not just because of the awkward position you’ll be putting your heirs in if you die before finalizing a plan. The taxes you can save – starting now – add to the urgency of moving on this as soon as you can.
If you would like to see how we’d personally help you set up tax-saving trusts, contact Hutch Ashoo, Co-Founder of Pillar Wealth Management at the number and email below. The savings on taxes for Ultra High Net Worth investors could be significant.
Get our free eBook on Optimizing Investment Performance for High Net Worth.
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