Financial Strategy Sample: What a Coordinated Plan Can Include
A financial strategy can mean different things to different people.
For one household, it may be a retirement savings plan. For a business owner, it may involve taxes, cash flow, investments, business equity, real estate, retirement, and a future transition.
The following financial strategy sample is illustrative. It is not individualized financial advice, and actual recommendations depend on the client's circumstances, objectives, risk tolerance, tax situation, and applicable law.
Step 1: Establish the Financial Baseline
A useful strategy starts with accurate information.
The baseline may include:
Income
Expenses
Cash reserves
Investment accounts
Retirement accounts
Real estate
Business interests
Debt
Insurance
Tax information
Estate documents
The purpose is to understand the current financial position before considering future decisions.
For business owners, current accounting information can be particularly important.
Compound Wealth's accounting model emphasizes current financial information and coordination with tax planning and business income.
Step 2: Clarify Financial Priorities
A financial strategy should connect financial decisions to actual goals.
Examples may include:
Retiring within a certain timeframe
Purchasing real estate
Reducing concentrated business exposure
Preparing for a business sale
Funding education
Increasing charitable giving
Building family wealth
Creating liquidity
Priorities can change, so a plan should have a process for revisiting them.
Step 3: Review Cash Flow
Cash flow is the bridge between income and financial goals.
A financial strategy may review:
Monthly spending
Business distributions
Irregular income
Debt payments
Savings
Investment contributions
Tax payments
Major upcoming expenses
Business owners may need to evaluate personal cash flow separately from business cash flow.
Step 4: Add Tax Planning
Taxes can influence many financial decisions.
A strategy may review:
Income timing
Retirement contributions
Roth conversions
Capital gains
Business distributions
Real estate
Charitable giving
Major transactions
Compound Wealth describes its tax planning as multi-year planning that considers income, deductions, timing, retirement, business decisions, and potential liquidity events.
Step 5: Review Investments
Investment planning may address:
Asset allocation
Diversification
Risk tolerance
Time horizon
Liquidity
Concentrated positions
Account location
Tax considerations
Investment decisions should be connected to the client's objectives and financial circumstances.
A financial strategy should not assume that a single portfolio is appropriate for everyone.
Step 6: Include Business Interests
For business owners, the company may be the family's largest asset.
A financial strategy can therefore include:
Business value
Ownership percentage
Compensation
Distributions
Entity structure
Succession
Liquidity
Concentration risk
If a sale is possible, planning can begin well before the transaction.
Step 7: Consider Real Estate
Real estate may serve as an investment, operating asset, family residence, or source of income.
A strategy may consider:
Property values
Debt
Cash flow
Depreciation
Ownership structure
Potential sales
Concentration
Estate planning
The purpose is to understand how real estate fits within total household wealth.
Step 8: Review Retirement Planning
Retirement planning can include both accumulation and distribution.
A plan may consider:
Retirement date
Spending needs
Social Security
Pension income
Retirement accounts
Roth assets
Taxable investments
Healthcare costs
Legacy goals
The strategy should be reviewed as assumptions change.
Step 9: Coordinate Estate Planning
Estate planning may address:
Beneficiaries
Trusts
Business succession
Charitable giving
Real estate
Family inheritance
Liquidity
Financial planners can coordinate with estate planning attorneys, but legal documents should be prepared and reviewed with qualified legal counsel.
Step 10: Create a Review Schedule
A financial strategy is not a document that sits untouched.
Reviews may occur annually or more frequently when circumstances change.
Major events that can warrant a review include:
Business sale
Marriage
Divorce
Inheritance
Retirement
Major property purchase
Significant income change
New business venture
Family changes
Compound Wealth describes ongoing planning checkpoints and scenario modeling around liquidity events, business exits, and family changes.
Illustrative Financial Strategy Sample
Imagine a hypothetical business owner with a growing company, several investment properties, retirement accounts, and a potential sale within five years.
An illustrative strategy could include:
Current position: Review business financials, personal balance sheet, real estate, investment accounts, debt, and tax history.
Tax planning: Model income, distributions, depreciation, retirement contributions, and potential transaction tax considerations.
Investment planning: Review diversification and the concentration of wealth in the business and real estate.
Business planning: Evaluate readiness for a future transaction, financial reporting, valuation considerations, and ownership structure.
Retirement planning: Estimate future spending needs and evaluate potential income sources.
Estate planning: Review beneficiaries, succession objectives, charitable interests, and coordination with legal counsel.
Review process: Revisit assumptions periodically as the business, investments, tax laws, and family circumstances change.
This example demonstrates the structure of a financial strategy, not a recommendation for any particular client.
Why Integration Matters
Financial decisions can overlap.
A business sale can affect taxes, investments, retirement, estate planning, and family wealth.
A real estate purchase can affect cash flow, financing, taxes, and investment allocation.
A Roth conversion can affect taxable income and retirement planning.
A coordinated financial strategy brings these conversations into the same planning framework.
Conclusion
A financial strategy sample is most useful when it shows how financial decisions connect.
A strong planning framework may include cash flow, taxes, investments, retirement, business interests, real estate, estate planning, and ongoing reviews.
The appropriate strategy depends on the individual or family's circumstances. The purpose of an integrated planning process is to help organize those decisions so each major financial choice can be evaluated within the broader financial picture.
Frequently Asked Questions About Financial Strategy Samples
What should a financial strategy include?
A financial strategy may include cash flow, investments, taxes, retirement, insurance, estate planning, business interests, real estate, and financial goals.
Is a financial strategy the same as a financial plan?
The terms are often used interchangeably, although firms may define them differently. Ask the planner what the planning process includes.
How often should a financial strategy be updated?
It should be reviewed when major circumstances change and periodically as part of an ongoing planning relationship.
Can business owners use a financial strategy?
Yes. Business owners may benefit from incorporating business income, ownership, taxes, liquidity, retirement, and personal wealth into the planning framework.
Should taxes be included in financial planning?
Tax considerations can affect investments, retirement, business decisions, charitable giving, and other areas of financial planning.
Can real estate be part of a financial strategy?
Yes. Real estate can be evaluated as part of the household's total assets, liabilities, income, and long-term planning.
What makes a financial strategy coordinated?
A coordinated strategy considers multiple financial areas together and evaluates how decisions in one area may affect another.
How does retirement fit into a financial strategy?
Retirement planning can include savings, income sources, investment allocation, taxes, spending, healthcare, and estate considerations.
Can a financial strategy include estate planning?
It can include financial coordination around estate goals, although legal estate documents require appropriate legal counsel.
Should I use an example financial strategy as personal advice?
No. Examples are educational. Individual strategies should be developed using the person's specific financial circumstances, objectives, and applicable rules.
If You Have Any of These Questions, Contact Compound Wealth
What should a financial strategy include for a business owner?
How can I organize my financial information before planning?
How should taxes fit into a financial strategy?
How can investment planning connect with retirement planning?
How should business equity fit into my personal financial plan?
How can real estate affect my overall financial strategy?
What should I review before a potential business sale?
How often should financial strategies be reviewed?
How can a financial planner coordinate with my CPA?
What financial information should I gather for a planning meeting?
How can I model different retirement scenarios?
What should a financial strategy include after a liquidity event?
How can I incorporate charitable planning into my financial strategy?
How can tax planning and wealth management work together?
What would a financial strategy sample look like for a business owner?
About Compound Wealth
As financial situations become more complex, many individuals seek planning that considers more than one aspect of their financial life. Compound Wealth integrates tax planning, wealth management, accounting, and business transition services to help clients evaluate decisions within the context of their broader financial objectives.
