This post was written by Christian Martinez, CERTIFIED FINANCIAL PLANNER™, Advisor Associate of Sandhill Investment Management, and Jonathan Amoia, Certified Private Wealth Advisor®
Small business owners and entrepreneurs wear many different hats when running their businesses. Hiring and firing, allocation of capital, sales, streamlining operations, and putting out fires are just a few of the responsibilities of a committed business owner. With all these in mind, it can be difficult to keep a close eye on personal finances for them and the future of their family. An experienced financial advisor can take on this task and help guide the financial wellbeing of a busy entrepreneur.
Sandhill is primarily known as an investment manager, but our team is equally focused on providing customized and comprehensive financial advice and planning. The spectrum of services that we offer range from decisions on a real estate deal, business succession, education planning for children, retirement strategies, life insurance review, and multigenerational estate planning. While the outcome for each family looks different, we are engaged in providing customized financial guidance daily.
Our team has invested in a best-in-class planning software to organize this process and each client can log in and see their entire financial picture all in one place, in real time. Below is an example of a sample client’s annual cash flow result, provided by the program:
Cash Flow | Base Facts (All Years)
The Cash Flow report illustrates your income, savings, expenses, and resulting net cash flow on an annual basis.
| Based upon the levels of income and spending in the Base Facts, your portfolio assets will last through at least 2056 (age 101/100). |
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These illustrations are for example purposes only. These examples will be different for every client based on their own financial circumstances. Actual results will vary, perhaps to a significant degree. The projected reports are hypothetical in nature and for illustrative purposes only. Return assumptions do not reflect the deduction of any commissions. They will reflect any fees or product charges when entered by the advisor/ representative. Deduction of such charges would result in a lower rate of return. Consult your legal and/or tax advisor before implementing any tax or legal strategies.
Cash Flow | Base Facts (All Years)
The Cash Flow report illustrates your income, savings, expenses, and resulting net cash flow on an annual basis.
| Year | Age | Income Flows | Investment Income | Planned Distributions | Other Inflows | Total Inflows | Total Expenses | Total Outflows | Net Cash Flow | Total Portfolio Assets |
| 2021 | 66/65 | $5,114 | $0 | $0 | $0 | $5,114 | $138,266 | $138,266 | ($133,152) | $2,103,009 |
| 2022 | 67/66 | 39,940 | 0 | 0 | 0 | 39,940 | 148,904 | 148,904 | (108,964) | 2,101,443 |
| 2023 | 68/67 | 58,361 | 0 | 0 | 0 | 58,361 | 153,818 | 153,818 | (95,457) | 2,112,490 |
| 2024 | 69/68 | 59,674 | 0 | 0 | 0 | 59,674 | 155,365 | 155,365 | (95,691) | 2,123,416 |
| 2025 | 70/69 | 61,017 | 0 | 0 | 0 | 61,017 | 155,917 | 155,917 | (94,900) | 2,135,085 |
| 2026 | 71/70 | 62,390 | 0 | 0 | 0 | 62,390 | 159,029 | 159,029 | (96,639) | 2,144,991 |
| 2027 | 72/71 | 63,794 | 0 | 22,633 | 0 | 86,427 | 168,354 | 168,354 | (81,927) | 2,146,864 |
| 2028 | 73/72 | 65,229 | 0 | 46,663 | 0 | 111,892 | 182,341 | 182,341 | (70,449) | 2,136,157 |
| 2029 | 74/73 | 66,697 | 0 | 48,627 | 0 | 115,324 | 176,765 | 176,765 | (61,441) | 2,131,908 |
| 2030 | 75/74 | 68,198 | 0 | 50,679 | 0 | 118,877 | 179,840 | 179,840 | (60,963) | 2,125,914 |
| 2031 | 76/75 | 69,732 | 0 | 52,715 | 0 | 122,447 | 182,995 | 182,995 | (60,548) | 2,118,045 |
| 2032 | 77/76 | 71,301 | 0 | 54,722 | 0 | 126,023 | 253,425 | 253,425 | (127,402) | 2,040,979 |
| 2033 | 78/77 | 72,905 | 0 | 56,794 | 0 | 129,699 | 240,385 | 240,385 | (110,686) | 1,974,018 |
| 2034 | 79/78 | 74,546 | 0 | 59,085 | 0 | 133,631 | 244,572 | 244,572 | (110,941) | 1,900,680 |
| 2035 | 80/79 | 76,223 | 0 | 61,469 | 0 | 137,692 | 284,742 | 284,742 | (147,050) | 1,784,653 |
| 2036 | 81/80 | 77,938 | 0 | 63,803 | 0 | 141,741 | 215,963 | 215,963 | (74,222) | 1,732,359 |
| 2037 | 82/81 | 79,692 | 0 | 66,192 | 0 | 145,884 | 220,127 | 220,127 | (74,243) | 1,674,859 |
| 2038 | 83/82 | 81,486 | 0 | 68,695 | 0 | 150,181 | 224,296 | 224,296 | (74,115) | 1,611,862 |
| 2039 | 84/83 | 83,320 | 0 | 71,241 | 0 | 154,561 | 150,843 | 150,843 | 3,718 | 1,620,738 |
| 2040 | 85/84 | 85,194 | 0 | 73,919 | 0 | 159,113 | 154,549 | 154,549 | 4,564 | 1,628,530 |
| 2041 | 86/85 | 87,111 | 0 | 76,410 | 0 | 163,521 | 158,199 | 158,199 | 5,322 | 1,635,267 |
| 2042 | 87/86 | 89,071 | 0 | 78,954 | 0 | 168,025 | 161,931 | 161,931 | 6,094 | 1,640,842 |
| 2043 | 88/87 | 91,076 | 0 | 81,304 | 0 | 172,380 | 165,705 | 165,705 | 6,675 | 1,645,188 |
| 2044 | 89/88 | 93,125 | 0 | 83,566 | 0 | 176,691 | 169,524 | 169,524 | 7,167 | 1,648,236 |
| 2045 | 90/89 | 95,221 | 0 | 85,942 | 0 | 181,163 | 173,489 | 173,489 | 7,674 | 1,649,825 |
| 2046 | 91/90 | 97,364 | 0 | 87,873 | 0 | 185,237 | 177,376 | 177,376 | 7,861 | 1,650,003 |
| 2047 | 92/91 | 99,555 | 0 | 89,739 | 0 | 189,294 | 181,302 | 181,302 | 7,992 | 1,648,724 |
| 2048 | 93/92 | 101,795 | 0 | 91,518 | 0 | 193,313 | 185,303 | 185,303 | 8,010 | 1,645,904 |
| 2049 | 94/93 | 104,085 | 0 | 92,822 | 0 | 196,907 | 189,208 | 189,208 | 7,699 | 1,641,634 |
| 2050 | 95/94 | 106,427 | 0 | 93,333 | 0 | 199,760 | 192,923 | 192,923 | 6,837 | 1,636,116 |
| 2051 | 96/95 | 108,821 | 0 | 93,212 | 0 | 202,033 | 196,492 | 196,492 | 5,541 | 1,629,547 |
| 2052 | 97/96 | 111,270 | 0 | 92,499 | 0 | 203,769 | 199,951 | 199,951 | 3,818 | 1,622,116 |
| 2053 | 98/97 | 113,773 | 0 | 91,801 | 0 | 205,574 | 203,541 | 203,541 | 2,033 | 1,613,810 |
| 2054 | 99/98 | 116,333 | 0 | 89,917 | 0 | 206,250 | 206,810 | 206,810 | (560) | 1,605,062 |
| 2055 | 100/99 | 118,951 | 0 | 87,197 | 500,000 | 706,148 | 209,828 | 209,828 | 496,320 | 1,377,586 |
These reports are diagnostic tools intended to review your current financial situation and suggest potential planning ideas and concepts that may be of benefit. The purpose of the report is to illustrate how accepted financial and estate planning principles may improve your current situation. The reports will be based upon information and assumptions provided by you (the client). This report provides broad and general guidelines on the advantages of certain financial planning concepts and does not constitute a recommendation of any particular technique. The consolidated report will be provided for informational purposes as a courtesy to you.
To generate this kind of result, we begin by understanding the client’s net worth by inputting all assets and liabilities. Then, we identify the significant cash inflows (income, selling a home, receiving an inheritance, obtaining payouts from a business liquidation, etc.) and outflows (living expenses, buying a home, paying down a mortgage or loan, wealth transfers, etc.). With all these data points entered into the software, it generates a long-term cash flow model that details when you will begin living off retirement funds and investments, how much annual income you will require, inflation, social security payments, tax implications, and market growth assumptions, along with other important factors.
With going through this process with dozens of clients, the most common result is that they feel a greater sense of comfort knowing where their financial life is headed, and it gives them the ability to make informed decisions with more certainty. Additionally, our team is able to provide thorough and thoughtful advice with a preview of your full financial picture.
With the above established, below are the various life stages along with the most common addressable challenges:
- Under 35 years old: Establishing a household budget and review process; debt management strategies; allocation of free cash to save for or pay down a home; reduction of student loans; college savings plan for children; maximizing retirement savings.
- 36 to 55 years old: Establishing a retirement age goal that drives an annual savings plan; retirement cash flow feasibility planning and budgeting; multiyear tax strategies; life insurance review; gifting strategies to heirs; business succession planning (within family or liquidation).
- 56 years old+: Solidifying annual cash flow plan for retirement stage; social security planning; determining projected value of estate and liquidation dates; creating flow chart to heirs and charities; determining estate tax implications and maximizing transfer through trusts and planned strategies; establishing coaching strategy to assure financial stability among children; execute business succession.
Executing this process with clients identifies financial, legal, tax, and family dynamic areas where our team can help to mitigate risk or bring in an outside professional. It enables us to provide a comprehensive solution to what clients worry about most.
Please reach out to me using the link here if you believe that creating a plan is valuable to you, or if you have any investment questions in general.
This material has been prepared for general informational purposes only and is not intended to provide — and should not be relied on for investment, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The information that has been discussed has been obtained from sources believed to be accurate; however, Sandhill Investment Management makes no guarantee as to the accuracy or completeness of the information.
This post was written by Christian Martinez, CERTIFIED FINANCIAL PLANNER™, Advisor Associate of Sandhill Investment Management, a Buffalo-based investment management firm. Since Sandhill’s inception in 2004, our passion for research has been our defining strength. By taking a thoughtful, thematic approach to the investment process, we are able to identify opportunities that offer the greatest combination of value and quality. Our deep commitment to our clients is at the forefront of everything we do. We understand that everyone’s situation is unique, and our range of investment products is carefully designed to ensure we are able to align expectations with execution.
Christian is a CERTIFIED FINANCIAL PLANNER™ and has been with Sandhill for over two years. He is passionate about creating a one-of-a-kind experience for his clients. Christian serves as a member of the Convergence Council at the Albright-Knox Art Gallery and sits on the Alumni Board of Governors at Canisius High School. He lives in the Elmwood Village with his wife, Leigh.
