- The Advisor's Playbook
- Posts
- When The Numbers Don't Matter
When The Numbers Don’t Matter
My Latest
Stop Living In a Spreadsheet
When The Numbers Don’t Matter
A Money Question
My Latest
My latest is for my athletes.
I teach you:
How a signing bonus is paid out
What you will owe in taxes
How to avoid surprises
Key strategies to consider
You can check it out here ⬇️⬇️⬇️
Stop Living In a Spreadsheet
Recently, I got my CFP®designation.
It is considered the best designation in the financial planning space.
Yet in doing the coursework for it, one thing stuck out ~ The application of the ideas was lacking.
You see, the book (or my instructor) would teach you about the topic.
They would then use an example of how this can (or should be) applied in a certain situation.
Yet, time and time again, I found myself thinking…yeah, not so much.
You see, it wasn’t that they were wrong in their thinking.
The math would always check out.
Yet in real life, the math is only one part of it.
Consider this analogy: You have the choice between two cars.
A Ferrari and a Ford F150.
One is a supercar worth hundreds of thousands of dollars.
One is a work truck worth a quarter of the other.
Which one is the better car?
Well, the math would say take the Ferrari, it is worth more.
Yet what if you are like me and do school drop off each morning?
My kids are not fitting in that Ferrari.
You see, just because something makes sense in a spreadsheet doesn’t mean it should be your choice in real life.
That same example holds true for nearly every aspect of your financial life.
The job that pays more but takes you away from what matters most to you.
The tax strategy that requires an investment you don’t fully understand.
The complicated estate planning move that hinders your liquidity.
They all make sense when you read the book.
They don’t all make sense in real life.
That is what I want to talk to you about today.
Connecting your desired outcomes with your decisions.
Let’s dive in…
______________________
When The Numbers Don’t Matter
I am a student of the game.
I have listened to more podcasts and read more books on business and money concepts than I can count.
Just ask my wife, she loves seeing me walking aimlessly on our street, AirPods in, knowing that I will be out there until whatever “silly” (in her head) podcast I am listening to ends.
I tell you that because you need to understand one thing:
I love numbers.
I love that they are concrete.
I love that there is a “right answer”.
Yet, what if I told you there are times when the numbers don’t matter.
The spreadsheet isn’t wrong, but it isn’t the right answer for you.
You see, I think we can all agree on one thing ~ We each have unique things we want.
Agreed?
Ok, great…(please tell me you agreed).
Let me share a story of what this looks like in real life.
A client of Moment has been working to set up their estate plan.
They are worth more than $30M today and will be worth more than $100M in a few years.
There is this little thing called the estate tax, where the government imposes a 40% tax on all assets over ~ $28M per couple when you die.
Example: Family dies with $100M of assets - $28M exemption = $72,000,000 taxed at 40%.
That is a $28,800,000 tax bill.
There are countless strategies that we can use to mitigate or eliminate that tax bill.
Yet with each one of those strategies, there is a caveat.
Many add complexity.
Some reduce liquidity.
Most are hard to change.
All in the name of reducing taxes, mind you, when the client is dead.
This tax hit will only be seen by the next generation.
So while the attorney has been quick to point out the tax savings.
I have been quick to remind the client that leaving their kids $70M+ has never been the desired outcome.
So while the complex estate plan makes perfect sense on the spreadsheet.
They are choosing to keep it simple today (so they have flexibility to adjust in the future).
The outcome they desire is future flexibility and reserving the right to change course.
Said another way ~ They are buying the F150, not the Ferrari.
Now look, they can always buy the Ferrari in the future.
Sure, waiting could make their “problem” bigger.
Yet it is the right move for them.
You see, the numbers don’t matter.
The desired outcome does.
______________________
Chances are, your financial situation looks different than the one above.
Yet the fact remains, you should be making financial decisions based on desired outcomes, not simply what the spreadsheet says.
That requires you to put real thought into it.
What do you want?
What is your desired outcome?
Only then should you start layering in money moves to get you there.
Until next time, my friends!
____________________
A Money Question
What would success look like in 5 years?
It is a timeframe that is far enough away to dream but close enough that you can all but taste it.
So spend a few minutes and answer it for yourself.
______________________
3 Ways I Can Help You
💰 Schedule an introductory call with Moment. We help athletes, entrepreneurs, and key employees build and protect wealth.
📹 Check out my YouTube channel. A safe place to get smarter with your money.
📷 Interact with me on Instagram. Where I provide bite-sized daily content to level up your money game.
Moment Private Wealth, LLC is a Registered Investment Advisor, located in the State of Missouri. Moment Private Wealth provides investment advisory and related services for clients nationally. Moment Private Wealth will maintain all applicable registrations and licenses as required by the various states in which Moment Private Wealth conducts business, as applicable. Moment Private Wealth renders individualized responses to persons in a particular state only after complying with all regulatory requirements, or under an applicable state exemption or exclusion. Nothing in this content is intended to be, and you should not consider anything in this content to be, investment, accounting, tax, or legal advice.