Goals-Based Planning: When was the last time you saw your wealth for the first time?
When we think about wealth, we often imagine it in different “mental” accounts. We assign certain values to money, based on its origins and what we intend to do with it. Because these values can fluctuate, they may not always match our intentions. That’s why we should evaluate our strategies with a goals-based plan
Your wealth was built with great intention. Its future should be too
Take the time to review the structure of your capital, then identify if your behaviours truly align with what you are aiming to accomplish. With over 200 years of experience, we appreciate that wealth planning is a personal and complex journey. By balancing practical and purposeful concerns, you can actively take steps towards realising your goals.
Viewing your wealth through our four unique lenses — liquidity (cash), lifestyle (spending), legacy, and growth — can help ensure that it’s arranged and utilised in a way that supports your intentions and values.
Liquidity (cash)
Many investors will plan for a contingency, to have enough money on hand to feel psychologically safe through the turmoil of markets, business cycles and life events. The goal is to ensure that spending or lifestyles will not be unexpectedly restricted or result in the sale of assets at the wrong time (i.e., sell low). Within the liquidity lens , we reserve cash for typical lifestyle expenses, big purchases or even for opportunistic purposes.
Lifestyle
By allocating strategically, investors can better maintain their lifestyle needs and wants. If, for example, they faced a large loss of capital in a business or concentrated investment—or a life event that left principal earners unable to work—this lens would have enough money to mitigate adverse effects and maintain a consistent way of living. Its contents are specifically tailored to an individual or family’s definition of ‘lifestyle.’
Legacy
The first two lenses provide money for use within one’s lifetime, while the legacy lens allocates money during or after your lifespan. There is, however, some flexibility here. If the lifestyle portion is drained too early due to factors such as longevity, the legacy lens can help. It may also be utilized for family gifts(either outright or via more complex wealth planning structures)as well as philanthropic gifts by way of family foundations.
Growth
It is important to note that the contents of the aforementioned segments of wealth—liquidity, lifestyle and legacy—are all meant to be consumed. The fourth and final lens, on the other hand, serve a different purpose. It is intended for long-term capital growth. This can act as the foundation for intergenerational wealth or philanthropic giving in perpetuity.
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A few questions to get you started. Speak with your J.P. Morgan team to create your goals-based plan today.
- Are you planning on any significant purchases or financial commitments in the near term?
- Do you anticipate any outsized outflows?
- How much capital would you like to have available for compelling investment opportunities, or for tactical deployment in market dislocations?
- How much cash would you need to tide you through market volatility and business cycles, or for an unforeseen event?
- What amount would you annually require to live as comfortably as you currently do?
- Are there any large outflows that you need to plan for?
- Do you anticipate any significant changes to your lifestyle needs over time?
- Are there any goals related to family members or loved ones that you view as a part of your lifestyle needs (education for children or grandchildren as an example)?
- Are there any other goals that you consider a part of your lifestyle?
- How would you define success when it comes to you, your business, your family and your legacy?
- What do you want your legacy to be?
- Do you have any goals meant to benefit people during or beyond your lifetime?
- Who is the wealth meant for?
- When do you want to transition assets/holdings?
- What would you like to give? Cash, investments, real estate, collectibles etc.?
- What would you like to achieve with your wealth?
- Who will own and steward assets beyond your lifetime? Family members, family office, professionals?
- How do you view your concentrated assets?
