Emerging Wealth

Business owners face unique challenges maintaining financial stability for their family as well as their employees. These individuals need to utilize tools to provide financial growth in more than one way. AOG will provide solutions allowing business owners to think outside the box.

  CASE STUDY

Doug and Kathy

BACKGROUND

Doug and Kathy are in their early 30’s and live in Northern Virginia. Doug is a computer engineer and Kathy is a scientist. As young, well-educated professionals, their combined annual salary is more than $300k. Additionally, Doug receives Restricted Stock Units (“RSUs”) annually from his company as part of his compensation.

They are expecting their second child later this year and hope to have more children. They would like for Kathy to work part-time until their children start school. Their parents have offered to partially fund college expenses for the grandchildren. Considering their high income, immediate and long-term goals, and family generosity, they engaged AOG to help expand their initial financial plan that would cover all their financial goals.

Maintaining a great marriage, the challenges of parenthood and a motivation to give more of their income to charitable endeavors propelled them to seek answers on how to prioritize their goals and better organize their finances.

AOG

ACTION PLAN

Identify Financial Goals - Doug and Kathy had many accounts with no clear plan in place. AOG Wealth Management helped them to have meaningful discussions about how to plan for and accomplish their goals.
  • They needed to purchase a new home that was large enough to accommodate their growing family. We were able to discuss down payment funding options and how to best save.
  • We discussed their short-term savings goals and the right amount to keep readily available.
  • We set up recurring contributions to their portfolio. This was in addition to investments in their company-sponsored retirement plans.
  • Doug and Kathy were encouraged to meet with an Estate Planning Attorney to establish a “just in case” plan, and ultimately provide for an orderly transition of assets to successive generations.
  • They only had Life Insurance coverage through their employers, so we helped them obtain affordable term insurance that was not dependent on their employers. The policy premiums and coverage can be reduced as their assets appreciate and their insurance needs decline.

Reallocate Total Portfolio to Align with Goals - With so many moving parts and goals in their plan, we reviewed all of their savings and investment accounts to match their goals with the funds already established and mapped a plan for funding all of the goals.
  • Their accounts were consolidated where possible and earmarked for specific purposes.
  • We discussed the AOG Modified Endowment Model and implemented it in their portfolio.
  • We developed a financial plan for a new home, college savings, and their “Work Optional” Lifestyle.
  • We reviewed their company-sponsored retirement plans to make sure the accounts also were in line with their goals.

Utilize Stock Grants Efficiently - Doug receives stock grants annually. He asked for our financial planning expertise to determine how to best take advantage of the additional compensation.
  • Each year we have encouraged Doug to sell the stock units once they vested. This was to diversify his portfolio and prevent concentration risk.
  • We also worked with their CPA to gift some shares directly to a Donor Advised Fund. The shares were acquired with a lower basis than the current market value. Rather than paying capital gains tax on the alpha, the current market value was gifted to a fund that allows supporting specific charities over time. This option aligned with Doug and Kathy’s goals to systematically give more to the causes they support as their family financial goals are attained.

AOG

WHERE ARE THEY NOW?

Identifying their financial goals was just the first step. Having the experience and wisdom to help them prioritize those goals and execute on a well-crafted portfolio design can make all the difference in achieving those goals with appropriate risk and in an achievable time frame.

Utilizing great technology to allow instant viewing and transparency of the plan and portfolio keeps clients and their advisors on the same page and focusing on success through all the changes life can bring.

Doug and Kathy have purchased their new family home and have stayed the course with their savings goals. Having a plan in place allowed for the unknown variables to be identified and planned for. They are happy to have a great team behind them every step of the way.
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