Hi there – I’m Mike Dechiario and joining me is Tom Charmley and we’re The Rootstock Financial
Why is it that most people would rather plan a 10-day trip than plan for their future? Why? Because
planning a trip lets you focus on what you want to do. It’s all about possibility and fun. What if planning
your future felt the same way? Because let’s face it, no one’s heart ever raced over an investment plan.
But knowing what you want to do most and knowing you have what you need to do it? There’s nothing
more exciting. And what you need is a process for making it happen.
The Purpose Driven Process is our custom approach we believe redefines investment planning by
emphasizing people over products, and putting our clients’ lives at the center of the portfolio. This
process answers the question: What’s the money for? What’s the purpose of the money? Because all
the money in the world doesn’t amount to much if you don’t know what you want to do with it. The
most important thing is to ask you what you really want and why. When’s the last time someone asked
Many advisors only help their clients manage their portfolio of investments. Most people think this is a
plan. This isn’t a plan. This is just a mixture of investments. Here is what it might look like if you only
talk about investments. This isn’t a plan either. Nothing here talks about what the money is for. And you
still have no idea if you’ll make it to your long-term goals. You can have a portfolio, but you may not
have any idea if those investments will be enough to pay for the life you want. We help clients manage
the portfolio of their life’s goals. That’s why we created the Portfolio of Goals. You’ll know just how your
investments fit in to help you achieve all your goals. So let’s dive into how we do this.
You’ve got assets. You know what you want your life to look like. Do you have a plan to help make it all
happen? Our process starts with what we call a purpose driven discussion, asking you experienced
questions and listening for your answers to help you create your Portfolio of Goals. And if your life is like
ours it definitely changes over time. The Portfolio of Goals does not just sit on a shelf. Our process
helps you make adjustments as your life changes and the world changes around you. And we help you
know what adjustments need to be made. That’s why it’s exciting. Once you do this you’ll want to revisit
it again and again. Because you’ll have confidence that the adjustments you make will help keep your life
on track. Everybody’s goals are different. Here’s an example of what A Portfolio of Goals might look like.
This is how these folks picture their life. These are their priorities. They want to educate their kids, and
retire someday, and do some spending, and give to causes they love. For each of these goals we help
them define their ideal vision of that goal and also what they can live with or what’s acceptable. What
you see here is that these folks would love to achieve all their ideal goals but they only have a 45%
chance of that happening that means they are underfunded. You wouldn’t want to leave it to a coin flips
chance to be able to do all the things in life you want. Isn’t it important to know if you are underfunded?
And to know how you could adjust to put life on track?
In this case in order to do some of the things they ideally want most they needed to adjust some of the things they weren’t as concerned with to the acceptable level. In this example, this client decided to make adjustments to their lower priorities. They adjusted their children’s inheritance, their charitable giving and their annual savings amount to the acceptable level. They were comfortable leaving less to their children, giving a lower amount to charity and saving more because this helped them achieve their higher priorities at the ideal level. These adjustments made their Portfolio of Goals well-funded. And our purpose driven process showed them how that could be done. That’s what we mean when we say - knowing what you want to do most, and knowing that you have what you need to do it, there is nothing more exciting.
Now like we said if your life is like ours it has definitely changed over time. And as your life changes you need a way to make adjustments. That’s where the Portfolio of Goals excels. Here’s what we mean.
None of us have any control over when something goes wrong in the world, when the market goes down a lot or when an unexpected expense comes up, or a cause pulls at your heartstrings and you feel compelled to donate significantly. And if that’s all you have is a portfolio of investments you don’t know if a market downturn or adding a new goal causes your other goals to be underfunded. When you don’t know how your goals are impacted that causes anxiety.
With the Portfolio of Goals you can see what adjustments you need to make in order to help keep your life on track. So see here, with a market downturn this portfolio decreased in value from six million to five million dollars. This caused the plan result to go down to 70% which is underfunded. So here’s how this works, because of our ongoing purpose driven discussions with these clients they knew exactly which goals they wanted to adjust. And through this process they could see that by making these adjustments their life goals were back on track and well-funded. That’s the level of clarity the Portfolio of Goals helps to provide.
On the flip side of the same coin, what if you receive an inheritance or sell a business or the markets go up significantly. Wouldn’t you like to know if you have more than enough to address your goals and what more you could fit into your life? If you just have a portfolio of investments, how would you know when to add new goals or what goals fit in? With your Portfolio of Goals you can add new goals and feel confident that they fit in. We’ll help you adjust your plan to do just that.
Look at this – due to selling their business this client had more than they needed to address their current Portfolio of Goals. They were overfunded at 92%. They wanted to know what else they could use their money for since they were overfunded. We had another purpose driven discussion with them and helped them discover that they could add new goals. In this case they decided to buy a beach home and travel more. This is what makes it exciting. You are in control of how to keep your life on track. And we use our experience with our purpose driven process to help you do it. Like a fitness app that tracks your steps you will want to check your progress and adjust your goals as different milestones are hit.
These are only a few of examples of how our process can help you live the best life you can. And as you see we don’t just help you manage a portfolio of investments—we help you manage a portfolio of your life’s goals.
What our client’s love most? We sit down at your kitchen table or on a Zoom call and talk about what’s most important to you. You know what you want to do most and we provide the process to help you have the confidence that you have what you need to do it. There is nothing more exciting.
The Purpose Driven Process and the Portfolio of Goals. A process that helps you plan for life and then helps you comfortably adjust as life happens.
Elements of this report's presentations and simulation results are under license from © 2003-2020 Wealthcare Capital Management LLC. All rights reserved.
IMPORTANT: The projections or other information generated by Envision regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.
The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy.
These referenced situations are hypothetical and for discussion purposes only. It is not intended to represent any specific return, yield or investment. Individual experiences referenced above may not reflect the future experience of any one client. The planning process discussed may not be suitable for your personal situation, even if it is similar to the example presented. Past performance is no guarantee of future results. Investing involves risk including the possible loss of principal.
Wells Fargo Advisors is not a legal or tax advisor. You should consult with your attorney, accountant and/or estate planner before taking any action.
This video is provided for informational/educational purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any planning strategy. Individuals need to make their own decisions based on their specific investment objectives, time horizon, risk tolerance and financial circumstances. Investing involves risk including the possible loss of principal. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Diversification does not guarantee profit or protect against loss in declining markets. Additional information is available on request.
Envision® methodology: Based on accepted statistical methods, the Envision tool uses a simulation model to test your Ideal, Acceptable and Recommended Investment Plans. The simulation model uses assumptions about inflation, financial market returns and the relationships among these variables. These assumptions were derived from analysis of historical data. Using Monte Carlo simulation, the Envision tool simulates 1,000 different potential outcomes over a lifetime of investing varying historical risk, return, and correlation amongst the assets. Some of these scenarios will assume strong financial market returns, similar to the best periods of history for investors. Others will be similar to the worst periods in investing history. Most scenarios will fall somewhere in between.
Elements of the Envision presentations and simulation results are under license from Wealthcare Capital Management LLC. © 2003-2020 Wealthcare Capital Management LLC. All Rights Reserved. Wealthcare Capital Management LLC is a separate entity and is not directly affiliated with Wells Fargo Advisors.
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