What’s your income profile presently?
Do you consider yourself struggling or making more money than you’d ever need?
(1 = Feel like I’m barely getting by….5 = Feel like I’m printing money)
What’s your income growth potential?
Are you highly upwardly mobile or are you likely peaked out in your income already?
(1 = I’m already retired…5 = I have clear, huge upside)
How far along are you in your career?
Do you have fifty years left to work still or are you already retired?
(1 = Already Retired…5 = Fifty Years or More)
What’s your inheritance potential?
Will you need to send your kids to college, support your parents (or other family) or do you come from a lot of money?
(1 = Lots of long-term financial familial obligations…5 = Lots of “old” money in the family)
What’s your risk tolerance?
Do you consider yourself a gambler or do you lose sleep at night about your money?
(1 = I just want to sleep at night…5 = I’m almost reckless)
How comfortable with your net worth are you?
Are you still looking to build your net worth from almost nothing or are you already very wealthy?
(1 = Still Struggling to have a net worth…5 = Already got more than I know what to do with)
What’s your investment and trading financial knowledge?
Do you really need some ABCs first or are you a markets expert already?
(1 = It’s all Greek to me…5 = I could have caught Madoff)
How liquid is your net worth?
Is your net worth tied up in a business or real estate or do you already have a bunch of your net worth liquid in stocks, cash, bonds and so on.
(1 = Not liquid at all…5 = Extremely liquid)
Q. What are your some of your topics of expertise, interests, hobbies, etc?
What are some things you’d consider yourself an expert in – daytrading, welding, plumbing, executive recruiting, web development, veterinary medicine, etc.
A. Susan — 58 years old. Worked until 44 years old as senior vp marketing of the U.S. Travel Association. Aside from professional credentials, Susan is a good cook and food blogger (Sauce and Sensibility), knows how to construct crossword puzzles, collect rare books and make things using paper cutting and decoupage techniques.
Bob is 68 and retired a couple of years ago from Disney (before that was with Amtrak for 20 years). Background is MBA–sales, marketing,advertising and call center management). Bob is an amazing photographer and has never forgotten anything–a very handy Jack of all trades kind of guy…
Q. What else should I know to help you come up with the best possible playbook just for you?
Be open and honest and share other important themes, concerns and hopes that I need to know about.
A. Our oldest son is 36 and independent. Our youngest two are 17 and 15 and soon to go to college and then grad school for both of them. Bob’s mom is 100 and living in a nursing home. We get some help from Medicaid for her but not entirely and we are her sole support. We have the financial needs of a much younger family and that is why we feel so stretched even though on paper we don’t look too bad– we are spending equity every month and need to supplement our income by at least $6,000 per month. We would like to stay in our home for at least another ten years or so, and would love to help our kids graduate from school without loans. That’s why we signed up for TWC and are excited about our Deep Dive.
Q. How is your portfolio currently diversified?
Give a ball park figure of how much you have exposed to various sectors: Stocks, Mutual Funds, Real Estate, Precious Metals, Cash, etc
A. $800,000 real estate including our home, a rental property and two REITs.
$100,000 cash as part of various equity accounts
$300,000 in IRA stock funds (Oppenheimer funds family including a large cap, small cap, china fund, growth & income)
$200,000 in oil and natural gas investments (illiquid)
$300,000 in equities in IRA accounts that Bob and I actively manage
Cody: We’ve had a initial discussion already. There will be a 5 to 10 pages of deliverable next week. Do you have any Gold or Silver?
Susan: No. They do have GDX though.
Cody: On a scale of 1 to 5, what is your concern in your lifetime the economy/financial system has a reset. (ie. banking system reformed). I am a 4.
Susan: Too ignorant on the subject to form opinion.
Cody: Your a 1 to 1.5 on it.
Bob: Bigger concern what is a consequence of reset on broader economy.
Cody: Bob is a 2.5 to 3. Between the two: they are a 2.
Cody: $100K as part of equity accts. No cash of that magnitude in checking and savings accounts?
Susan: They have Funds tied up in IRA’s. 1 of IRA inherited from mother 4 years ago. She bought all Apple. It has double. It has $100k. She can take this cause its a beneficiary IRA. She uses this account for TWC.
She has her IRA also. One IRA has about $20k in cash. In another $40k.
Cody: They need to have $50k to $100k in checking account or freezer. Also, Gold and silver. Ready and easy access to. This will be emergency aid. Should have $20k to 50k in checking/savings. $20k to $30k in Gold and silver. Another $20k or $30k in safe deposit box. Just get some diversification and hedging. A crash now would hurt them cause they don’t have access to their money. Get them in position where they have reasonable upside but cash set aside for another 2008.
Susan: they were much better off before 2008.
Cody: take money out of Apple and put it somewhere safe.
Cody: Call Cody once per quarter and discuss financial moves. Quote was $2,500 for Deep Dive. Includes: Annual subscription worth $1K plus $1,500 towards 5 to 10 page deliverable as a playbook. Also, ability to call Cody over the next 3 or 4 years for major financial moves. If a crisis occurs email or contact us.
Bob: In terms of cash, brokerage accounts have significant cash in them to take advantage of opportunities. Does it make a difference where the cash is?
Cody: yes it does. There needs to be that money . Need less exposure to brokerage firms. Mentioned MF Global. People who had heir money in MF Global couldn’t get their money out. It took them 6 months to get their money. They need 10% in checking/savings/Gold/safe deposit.
Bob: 2nd question. Is part of this going to be equities? What ought to be in portfolio? They want to build portfolio around Cody’s recommendations.
Cody: This will mainly be advice on managing their funds. For example, if they have too many REIT’s, get out cause they have too much in real estate already. In IRA’s they should have $200K exposed to TWC top picks.
Susan: Biggest problem they need to generate income.
Cody: how to get diversified income.
Susan: trying to claw back from disastrous 2008 also from Apple. Sold at over $700, bought back at $630.
Cody: 2 thoughts: 1) no need to claw back. They look fine. They won’t always be at peak net worth. #2) Won’t believe how many people have been buried in REIT’s. Almost a conspiracy. Some of the smartest investors have been buried in REIT’s.
Cody: Playbook first part of next week. Get started on figuring out how to get $50k to $100k closer to hands.
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