Cash Management/Balancing Business and Lifestyle
“Determining how to prioritize cash is perplexing considering all we are balancing: college funding, maintaining a comfortable lifestyle, preparing for retirement, making debt payments for our business and real estate loans and keeping cash available for projects to help our business continue to grow.”
- Jon, age 52, and Karen, age 54
- Two children in college
- Business entity, real estate and other assets valued at $3 million
Jon is a smart businessman who works hard to provide for his family, but lately he has been under much financial stress. The business annually provides adequate profit to fund the family needs (and then some); however, cash flow is going in so many different directions, he feels like they aren’t making any progress. How can cash flow from the business be arranged and organized to most efficiently achieve the life Jon and Karen want while adding extra flexibility along the way?
Payne Wealth Partners would recommend preparation of a wealth plan illustrating all the free cash flow needs Jon and Karen have in terms of dollar amounts and timing for both business and family. Through deep financial analysis we would help Jon and Karen restructure their personal and business balance sheets to work efficiently in tandem while freeing up additional cash flow.
Working with Jon and Karen’s CPA, we would design more tax-efficient ways to complete business projects, pay for their children’s college educations and eliminate business debt.
Using their personal wealth plan as a platform, we would help them envision what the next 10 years would look like leading up to a retirement lifestyle that meets their goals.
Additionally, written recommendations would be prepared that spelled out precisely what needed to be accomplished today to ensure they remained on track for the future.
An investment management program would be recommended that considers Jon and Karen’s entire situation, carries the correct level of risk given their business and other risks and has liquidity that fits with their life needs.Disclaimer – These case studies are for illustrative purposes only. They are not based on a particular client’s circumstances and are not personal advice. As this information has been prepared without considering your objectives, financial situation or needs, you should consider its appropriateness to your circumstances. You should seek assistance from your financial adviser before acting on this information.
The bulk of my wealth is tied up in my business, and I know it cannot be left to risk. How can I transition from being a business owner to my next phase in life on my own terms?
Determining how to prioritize cash is perplexing considering all we are balancing: college funding, maintaining a comfortable lifestyle, preparing for retirement, making debt payments for our business and real estate loans and keeping cash available for projects to help our business continue to grow.
My business is service related, and I am worried when it comes to retiring there won’t be an option to sell the business or transition it to new owners. How can I ensure I am financially ready for retirement independent of my business entity?