Accumulation basics

Saving and investing are the components of wealth accumulation. The former is in your hands based on earning power, discipline and sometimes good fortune. Investing is making money on your money. That requires a strategy.

  • Capital markets – stocks and bonds - are not mandatory. Some people prefer real estate, collectables, mattresses. But in the end, historically, the stock market has returned about 9.5% per annum versus 3.7% for real estate using the S&P 500 and the Case Shiller Housing Index.
  • Active vs Passive - If cost is most important and you believe broad asset class allocation is the way to achieve returns, passive is for you. If you want to include a decision about whether to own GM or Ford or neither (or Tesla) active is your route.
  • Concentration vs Diversity - You’ll achieve much better returns if you pick a small handful of winners, but not if there is a loser or two in a small group. A really large selection will reduce the impact of a big winner. Maybe a middle of the road approach is best?
  • Profit taking vs holding - Some investors don’t enjoy when stocks back down off their highs. They like to capture that profit at its best and try to buy the stock back when it’s lower. The great investor Barnard Baruch said “you never go broke taking profits” but remember that the greatest investor of our times, Warren Buffett, buys and holds, sometimes forever, and buys more when it’s down. Again, maybe a combination is best.
  • Risk profile - This is personal. There is no wrong answer. This determines your mixture of stocks and bonds, the type of stocks you buy, selling vs holding, concentration vs diversity. This we will spend time discussing.
  • Time horizon - Another very important factor; the key - be honest!

Lots of decisions to be made. This is why we emphasize custom wealth management. The final strategy will be based on you and your assessment of these factors together with best practices. Please contact me if your accumulation strategy deserves some attention.

Maximizing your benefits and wealth accumulation

Whether a Corporate Executive or a closely-held Business Owner, reaping the rewards of your efforts is key. Are you taking full advantage of all that is available? Let me analyze all your opportunities, options and benefits to see if you are leaving anything on the table or making any mistakes, with no obligation.

Business Owners, there could be better plan designs that skew contributions to you and/or your key employees. Or, what if you could reduce corporate taxes, raise employee goodwill and increase your personal retirement savings all at the same time simply by changing your retirement plan cost structure. Are you ready for the ultimate corporate transition? Do you know what you want it to be?

Corporate Executives, here’s your chance to do that complete review of your total compensation package you’ve been meaning to do for years; are your investment choices appropriate, how much risk is the deferred comp plan, what should you do with your company stock?

Please contact me today if you would like to discuss a personal analysis.