How do we work with Business Owners?
Tyler and Rebecca Jones
Age 45
Kids: Will (10), Anna (6), Michael (4)
Primary Goals:
Tyler and Rebecca want to make sure they are properly managing their personal investments alongside their business assets.
The Challenge:
Tyler and Rebecca own a closely held business set up as a LLC that files as a S-Corp with a few employees. They recognize their business represents a significant portion of their net worth and income. While owning a successful business has its rewards it also has its risks.
They are:
Looking for ways to invest outside their business so the majority of their net worth is not tied to their business.
Paying down the mortgage on their primary residence.
Trying to put some money aside for their kids college fund.
Accumulating a larger cash position in their business accounts due to recent growth in their business.
Have been contributing to Individual IRA Accounts since there is no Employer Sonsored plan with their business.
The Approach:
Tyler and Rebecca feel like they are on the right track, but would like some help organizing their assets and put them into perspective.
After our first meeting where we discussed their priorities we linked their investment accounts in Right Capital along side their other assets to create a networth snapshot. We also uploaded their previous two years tax returns into Holistiplan to understand their tax brackets and look for opportunities.
From there we established a company sponsored Retirement Plan for their company to allow Tyler, Rebecca and their employees take advantage of making pre tax contributions into a retirement account and receive an employer match.
We also put a plan together to invest some of the accumulated cash from their business into a taxable brokerage account.
Understanding that business owners have several important relationships, we established a working relationship with their existing team, IE CPA, Attorney, Banker and internal finance team to busild a plan to responsibly invest cash generated from the business and accounts for future growth of the business.
From there we set up a plan to meet 3x a year to discuss:
January/February: Prepare for Tax time and plan to make remaining contributions before the filing deadline and discuss the coming year to account for any changes.
May/June: Ensure all beneficiaries are correct and review investment accounts. Make sure they are on schedule with their savings plan. If there were any surprises with their tax return ensure we account for them in the coming months.
October/November: Discuss open enrollment for their employee benefits and make any changes necessary. Also inventory Life and Disability insurance and account for any shortfalls. Prepare for end of year and discuss coming year income.