Choosing the Right Financial Game Plan
Have you ever wondered why certain coaches seem more successful at winning games than their competition? Just having talented players doesn't guarantee winning. A great coach knows how to position his players for both offense and defense. In fact, some believe it's the defense that really wins the games.
I'm often in the stands rooting for my daughter, Cydney, who plays on the Wilsonville High School Wildcats girls basketball team. The coach makes adjustments measuring the plays that can make a difference in the outcome of the game. The proper adjustments can refocus the team for a winning strategy.
I'm a mother of two children, ages 11 and 16, who are active members of school and club sports teams. When they were younger, I coached some of their athletic teams. But that's not been the full extent of my coaching activities.
For the past twenty years, I've also been helping families plan for their financial futures. Like team sports, comprehensive financial planning uses both defensive and offensive strategies. Together, we can develop an offensive financial plan that helps build wealth, and a defensive plan that helps protect it.
A good offensive strategy works steadily toward your long-term goals using diversified, risk-appropriate portfolios designed primarily for growth, but may also provide income. We might think of it as those assets designed to build wealth: real estate, a business, and equity securities--all are ownership assets. They may also produce income through profits, rents, or dividends. Ownership assets are capital assets taxed primarily as capital gains. Income from dividends, rents or profit distributions will be taxed differently.
A defensive strategy could include insurance, legal matters, cash reserves, and any plan that protects one from loss. It is designed to reduce your exposure to market risk, and works to protect you from undue volatility while seeking to limit damage so that you can continue to make progress when conditions turn positive again. Tactically employed cash, short-term fixed income investments, or even insurance coverage can play this role in your portfolio.
Tax planning fits nicely between offense and defense because it applies to both. If we can plan well, we can both protect assets and build them by understanding and implementing efficient tax strategies.
Some of the strategic plays may include:
Like a winning coach adjusts the game strategy both offensively and defensively, good financial planning does the same. As your personal financial coach, we can work together to achieve your own game plan for future financial success. Let's talk.
McGee Wealth Management, Inc.
12455 SW 68th Ave., Portland, OR 97223