Wealth Management Engineered

7 Steps to Engineering Your Financial Future

When it comes to wealth and achieving one’s financial goals, many variables require thoughtful consideration. There are the investments: stocks, bonds, mutual funds, ETFs, crypto, and everyone’s favorite “safe haven” gold, amongst others. There is a menu of options in our 401(k)s, Roth and Traditional “vehicles” to choose from, analysts debating both sides (buy vs. sell) of a single stock, economists hinting recession while others see clear skies ahead, not to mention the influx of commercials on CNBC vying to influence your decisions. Did I mention how much you should be saving towards retirement? So how does anyone make sense of it all amidst the ever-present noise? Well first, we control what we can control. But what if I told you the path to achieving your financial goals was no different than following the engineering design process? 

Define the Problem and Conduct Research

Steps 1 and 2 of the design process are to Define the Problem and Conduct Research. This entails understanding the “why” of the problem and how a solution could create a better experience. By understanding the problem, you are able to identify the design goals. This is echoed in the first steps of holistic wealth management. At Greenleaf Trust, we first take a deep dive to understand your current financial picture. By creating a holistic view of your finances and helping you identify and prioritize your goals, we gather the appropriate resources and experts to tailor your holistic plan’s design to meet your needs. 

Brainstorm and Conceptualize

In Step 3 engineers are tasked with Brainstorming and Conceptualizing ideas to help achieve their goal. This may require looking at the current course of action to determine where roadblocks are met and leveraging your skills and expertise to produce alternative solutions. This closely parallels the third step to holistic wealth management. By analyzing the current decisions (all that fun stuff up top), we find areas of weakness and collectively brainstorm strategic solutions with subject matter experts. Even if the current route is obstacle free, we might just know of a few more efficient shortcuts or alternate routes with less potholes along the way.  

Create a Prototype

Step 4 is where the rubber meets the road, it’s time to Create a Prototype. While the first three steps were fundamental to establishing the proper tests and procedures, creating the prototype is the first time a workable model is produced from brainstorming sessions. This is no different than the holistic planning process. First, we design an individualized financial plan based on information gathered. This integrates strategic planning alterations to your current course of action to simulate their effect on achieving your goals. Through this process, we identify potential strategies such as “Backdoor Roth conversions,” charitable giving strategies, financing decisions, investment and asset allocation shifts, and various other tax planning and estate planning techniques that increase your plan’s efficiency.  

Select and Finalize

Now that testing is done, it is time for Step 5 – Selecting and Finalizing the design. Often times there’s more than one route to a single destination. Over the years, transportation efficiencies have been greatly improved by various engineering marvels. Thanks to these solutions, we have options to achieve our travel goals. If your travel goal is to leave behind the snow, cold, and wind of a Michigan winter, you can hop on a plane and arrive in sunny Miami in just a few hours. Or maybe you enjoy a long road trip and savor the twenty-hour drive to southern Florida. In either case, you achieve your goal, but preference allows you to make a decision right for you. Holistic planning can often provide multiple paths to achieve your financial goals. Going over the pros and cons of each option, such as tax implications, savings plans, or control of assets can help you decide which strategy fits the legacy you would like to leave. The right path for you may not be the same as your neighbor chooses.  

Analyze and Improve

The final steps of the design process focus on continuous improvement. Step 6 involves Product Analysis, while Step 7 takes the data gathered to Improve Product Design. As standards change, expectations change with them. Most recently the shift from ICE to EV transportation is getting a lot of attention. Whether or not EVs are here to stay, engineers are faced with new challenges in design to produce the most sought-after product. And so, year after year, we see new additions to lineups and new features to accommodate demand. Well, you guessed it, holistic wealth management follows this process by implementing the agreed upon plan and continuing to monitor its efficiency and sustainability. As  seen recently, periodic changes in tax code and market conditions can have dramatic ramifications on the longevity of financial security. Your holistic plan is not meant to be rigid, but instead flexible and adaptable to the changing landscape we live and retire in. Leveraging planning software to maximize conviction as the landscape changes can better prepare you for those what-if moments in life.  

In the end there will be investment winners and losers. There will be more recessions.  There will be new administrations, and new tax regimes.  And the rules of the road in your retirement plan can change from year to year. Being a good investor is like being a good engineer, you must adapt to the world around you. But you do not have to invent like Henry Ford or invest like Warren Buffet to achieve your goals. Believe it or not, making the right stock picks only accounts for a small fraction of your overall success. Maintaining discipline through trying times with proper planning in asset allocation, income tax, education savings, insurance, and estate planning can help you engineer your own financial success.  

Let Greenleaf Trust help you achieve your goals by starting the design process today. 

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