Resource Partners

Wealthy and Wise

Executive Summary
To be credible, any form of wealth planning must be capable of addressing the following issues:

• Real wealth involves sustainable Cash Flow, and most people are more concerned with running out of money than any other financial issue.

• An effective wealth planning program must have the capacity to:

1. Include the financial impact of a client’s required after tax Cash Flow in the analysis (including a factor for inflation);

2. Calculate the most efficient distribution from liquid assets to produce the required Cash Flow;

3. Convert illiquid assets to liquid assets at any time a shortfall of required Cash Flow exists;

4. Calculate Net Worth using realistic asset-by-asset client assumptions (after accounting for required Cash Flow);

5. Provide a client-approved comfort zone of residual Net Worth in all years;

6. Illustrate revisions to the asset mix to improve Cash Flow and maximize Net Worth;

7. Integrate alternative recommendations now or in the future;

8. Maximize Wealth to Heirs in coordination with the most efficient pre-death Net Worth;

9. Illustrate varying levels of death taxes due to the unstable nature of federal estate taxes;

10. Analyze all planning variations in “do-it-versus-don’t-do-it” graphical comparisons;

11. Provide year-by-year numerical backup for every aspect of the analysis so that professional advisers can easily audit any aspect of it.

There are many narrow gauge issues addressed by specialty programs (retirement planning, pension analysis, asset allocation, estate taxes, and charitable giving, to name just a few), and these programs retain their importance; however, effective wealth planning only takes place when the recommendations from these focused programs are integrated into an overall analysis containing the features noted above. This is because the key determinant of the effectiveness of any analysis must always be don’t run out of money before you run out of time, and it is impossible to measure the impact of a narrowly focused recommendation on Cash Flow and Net Worth without integrating it into the overall plan.

For the client reading this report: Most advisers do not offer this type of analysis, but every single-issue financial strategy you consider must be looked at in this manner because you don’t want to run out of money before you run out of time. Once you establish your initial Wealthy and Wise base line, it will be forever easy to “test drive” any new financial recommendations through the model to gauge its impact on your Cash Flow, Net Worth, and Wealth to Heirs.

For the marketing and compliance officers of financial institutions reading this report: The suitability of recommendations made to consumers is not complete unless those recommendations are evaluated within the context of a Wealthy and Wise analysis.

For the planning specialist reading this report: If you are not using Wealthy and Wise logic, pray your competition isn’t either.

There is only one source for this dynamic evaluation: Wealthy and Wise by InsMark.

Note: A more extensive report is available that elaborates on the issues discussed in this Executive Summary. Call 1-888-InsMark (467-6275) and ask for a copy of the Wealthy and Wise Logic Report.

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