If you’ve ever worked with a financial advisor before, you may have noticed that the focus of the conversation was often on how much money you have, where it’s invested, and how they can find better products to earn a higher rate of return. However, this singular focus on earning higher returns often comes with higher risk. Despite the abundance of analytics and mathematical tools available today, nobody can accurately predict the future. While earning higher returns is certainly beneficial, our approach prioritizes helping clients avoid unnecessary losses before considering riskier options. We believe that evaluating the efficiency of your personal economic model requires consideration of factors beyond just returns.

There are three types of money that must be considered when securing your financial future.

Accumulated money represents the money you currently have invested and are saving. While it’s important to focus on finding better investments with higher returns, it’s important to consider other factors as well.

Lifestyle money represents the money you spend to maintain your standard of living. Many people are hesitant to reduce their current standard of living in order to improve their financial situation.

Transferred money represents the money you may be unknowingly and unnecessarily transferring away. This includes how you pay for your home, taxes, retirement accounts, non-deductible interest, and major expenses such as cars and education.

A financial advisor can help you in two ways: by finding better products with higher returns (but requiring more risk), or by helping you be more efficient by avoiding unnecessary losses. At our firm, we focus on the latter approach and work with clients to eliminate involuntary and unnecessary wealth transfers.

Think of it like filling a bucket with holes. One approach is to pour more in, but the other is to plug the holes first. Our approach is to first eliminate the unnecessary losses so that your wealth can grow even with just a trickle of income. Consider this approach to financial management and how it can benefit your financial future.