Analysis of Overall Financial Health and Portfolio
Start with an asset, liability, and cash-flow analysis
Your complex financial situation is likely to involve an array of assets, liabilities, revenue sources, and spending patterns. Effectively managing your wealth requires a clear understanding of each of these pieces and how they interact. A plan that focuses solely on managing your investment assets, for example, could be undermined by the impact of current or future liabilities, a change in your income, or your family’s typical spending patterns. Our wealth management team conducts an in-depth financial history and investment portfolio analysis to thoroughly understand every aspect of your financial picture before developing a customized plan to help you achieve financial well-being.
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All of your assets should be considered in putting together a comprehensive financial plan. There may be many different items in this category, including:
- Cash accounts
- Investments in marketable securities such as stocks, bonds, and options
- Real estate, including equity in family residences and income-generating properties
- Valuable possessions or collections (jewelry, art, antiques, cars, etc.)
- Intangible assets such as patents and trademarks, copyrights, royalty agreements, or equity in a private business.
Any wealth management analysis should include detailed information on your current assets, including their type, quantity, location, and current market value.
Liabilities generally include:
- Current bills
- Balances owed for major assets like boats and houses
- Credit card balances
- Other loans
Liability analysis should lead to an understanding of existing debts and the potential impact of any new planned or unplanned obligations.
On your personal balance sheet, your assets minus your liabilities equals your net worth, which is essentially a snapshot of your wealth at a specific period in time.
Cash flow is as essential as net worth in planning for financial goals. Cash inflows are anything that puts cash in your hand, from salaries and other income to capital gains and royalty receipts. Cash outflows include all of your spending on bills, loan payments, groceries, clothes and furnishings, personal items, and entertainment and travel expenses.
Understanding your family’s spending habits, as well as income and expense projections, can show how much positive net cash flow you will have to apply toward growing your net worth and meeting your goals. If your cash flow is regularly negative — you spend more than you earn — that is also important to know. You will want to consider if this situation is desired and/or sustainable at this point in your financial life.
Financial Health Analysis — A Critical Foundation
Everything you achieve in the future will be built on the foundation of where you are today, so understanding the details of your current situation is essential. With this understanding, our team will be equipped to provide you with customized guidance in college savings, retirement planning, tax planning, and more.