Strong Bones, Strong Finances: Building a Lasting Foundation
When it comes to family life, few things are more important than feeling secure. And one of the best ways to help ensure your family’s security is having a well-built financial plan. At the heart of any strong financial plan is something we refer to as financial structural integrity. In engineering, structural integrity means a design that can support its intended load without collapsing, breaking or tearing apart, even when unexpected challenges arise.
In her 2020 song The Bones, Maren Morris captures this idea beautifully, comparing a strong relationship to an old house with a solid foundation. Even when the paint peels or the glass shatters, a house stands strong because “the bones are good.” The same principle applies to family finances. A plan with structural integrity can help you weather life’s surprises, whether it’s unexpected medical bills, job loss, or market downturns, and doing so without forcing you to compromise on your long-term goals.
Building Structural Integrity
So, how do we help ensure your financial “bones” are strong? The answer lies in building structural integrity into your plan across eight key areas. To do so, we look at how you are currently positioned, identify where risks might still exist, and then address the threats that carry the highest magnitude of risk.
Ultimately, financial success comes down to the long-term sustainability of cash flow in order to achieve the things that bring you and your family joy. When our clients are solid in these eight areas—and understand the interplay between them—we have found that they are much better positioned for sustainable financial success:
- Liability protection. This means examining where you could become liable to others. For example, if you are at fault in a car accident, the most important aspect of your auto insurance is liability coverage.* This makes sure that the insurance company will cover claims related to any resulting lawsuits while protecting your assets and future income stream.
- Disability protection. Remember that your most important asset is your ability to earn a paycheck. Disability insurance helps to ensure your paycheck continues, even if life throws a curveball.
- Mortality protection (Life insurance). Life insurance is complex and can be intimidating. Our goal is to clarify its misconceptions and educate people about the different roles it can play in building financial confidence.
- Transfer protection (Estate planning). We make sure your will and supporting documents (e.g., healthcare proxies and powers of attorney) are complete, up-to-date and meet your wishes.
- Future protection (Savings rate). We know that long-term financial success is more highly correlated to rate of savings than it is to rate of return. We work with you to save at least 20% of your income or make a plan to get there over time.
- Emergency protection (Liquidity). Having the appropriate amount of safe, liquid funds for emergencies or opportunities keeps you prepared and flexible.
- Obligation protection (Debt management). We look at the amount and type of debt you have and determine how to eliminate it. Having too much debt can block success in other domains of your plan.
- Volatility protection (Investment philosophy and strategy). We assess whether the overall investment amount and the risk profile of that amount are in line with your goals and your ability to experience market fluctuations without panic.
Effective financial planning can be complicated and time-consuming. While you could take a DIY approach, this can lead to blind spots, and worse, cracks in your foundation. Just as you wouldn’t build a home without an architect, building a resilient financial plan is easier and safer with guidance from experienced advisors. We help families like yours identify risks, shore up weaknesses, and create a plan that supports the life you want to live. Check out these 15 Financial Rules to Live By here that further guide our thinking.
If you need help ensuring that your existing financial plan is built to last or help creating one that reflects your goals and needs, please reach out to me at Gary_Blum@strategiesforwealth.com, call me at 914-288-8862, or leave your name and email via this web form. Let’s start the conversation today.
*Neither Guardian or its subsidiaries offer auto insurance.
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
Gary Blum is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Strategies for Wealth is not an affiliate or subsidiary of PAS or Guardian. Not practicing CPA for Guardian or its subsidiaries or affiliates. CA Insurance License # 0M10186.
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