Something John said in a recent interview stuck with me. He noted that most of the families we’ve worked with over the years tend not to think of themselves as “savers,” contrary to so much of the language of financial planning out there. I think he’s right.
The families we serve tend to be builders. They like things that grow. They buy more businesses, they buy more real estate, they put more into their retirement plan. I honestly cannot remember the last time I heard one of them describe what they do as saving.
Even after someone has retired—or after they have sold a business—many of them still have the appetite and the opportunities to keep acquiring and growing. The question we often entertain is: How often are we looking at new growth, new expansion, or investment opportunities that stretch them in a new direction?
The answer is: frequently.
When someone has more than they need (when their core cost of living is fully covered), you usually end up with a second pile of funds that we describe as excess. With that pile, you can go one of two ways.
- Putting it all in Treasuries and hoping it keeps up with inflation.
- Or, even though a rate of return is not guaranteed, investing it more aggressively: real estate, private businesses, lending, partnerships, and private deals.
What we see is that most of our clients lean toward the latter. If you have spent your whole life working hard to get your money to work hard for you, it is very difficult to let extra assets sit idly in “safety mode.” The desire to build and grow does not disappear. As John said, it still “festers within”.
We acknowledge this about personalities because it shows up in the planning process. If you have this inclination, you need a financial planning team that is equipped to help you continue building your balance sheet, both within and beyond your portfolio. You need:
- Reliable modeling for income that conservatively covers your lifestyle
- Meaningful experience with significant non-portfolio transactions like commercial real estate or alternative investments
- Fully-integrated coordination across your team of financial professionals (CPAs, attorneys, etc)
A Question for Anyone Approaching Retirement
If you are heading into retirement—or just past an exit—ask yourself:
- Do I still have the builder’s mindset?
- What part of my balance sheet is truly “excess,” and what should its purpose be?
- Where am I letting assets sit that should be working harder for me?
Retirement does not end the building mentality. For many families, it is when that mentality finally gets to work on their terms. Having a fully-integrated financial plan is key to making that possible.
