Gaining Your Financial Interdependence

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With the Fourth of July right around the corner, everyone is ready to celebrate our nation’s independence.  There are many benefits of independence, not the least of which is the opportunity to improve our standard of living. But is there another type of dependence that can help us achieve more than just relying on our own independence?

One of the 21st century’s most respected leadership minds, Stephen R. Covey, explained the idea of interdependence.  Interdependence is understanding your own capabilities, but also choosing to work with others to achieve much more than if working on your own.  To create your own financial interdependence, we are immediately drawn to the idea of assembling a financial team.  Below are a few of the important “players” on anyone’s financial team and a brief description of their roles:

Wealth Advisor:  A wealth advisor can help in many different areas.  Their purpose is to ensure your assets are managed in an appropriate manner based on your risk tolerance.  A wealth advisor can help create a plan to achieve your specific goals for the assets you have acquired.  There are different options based on the type of account, such as IRAs, Roth IRAs, 401(k)s and individual accounts.  Having a plan to maximize each type of accounts’ strength can help put you in a better position.   

Attorney: Two things in life are constant, death and taxes.   When going through life, you will inevitably need an attorney for a contract review, such as a purchase of a home or business, or for estate planning advice and document preparation.  Attorneys are very beneficial because they can create a plan for the disposition of your assets based on your desires.  Each individual is different, and making sure you have an attorney to help plan for your property during your life and at death is critical to a seamless transition.

Certified Public Accountant (CPA): Everyone is subject to taxes throughout their life, in the form of sales tax, income tax and real estate tax.  Typically people are looking for a CPA during tax time, but having this member on your team during other parts of the year will ensure you are covered at all times, including unusual life events.

Insurance Representative:  Let’s face it, we live in a litigious society and we all risk being hit by the proverbial bus, leading to our premature death.   In either case, an insurance representative can help illuminate personal liabilities and how to best protect one’s family and future.  Insurance can impact the estate plan drafted by the attorney as well as the necessary cash flow in the financial plan the wealth advisor created.  It is best to achieve interdependence and make sure your service team is working together.

Commercial/Mortgage Lender:  Throughout life you may purchase a home or two, or maybe buy a business.  In either case, a trusted lender can make sure you are taken care of.  Also, the relationship is important in discussing the varieties of risks and opportunities before making a life-changing purchase.

Though you may have the baseline skills to handle each role described above, assembling a team of specialists responsible for each aspect of your financial picture will help ensure you meet your financial goals and dreams, more easily.  We would encourage you to review your team of professionals and make sure they are working holistically and in sync to create the best outcome for you and your family.  Just ask yourself, “Am I interdependent?”

Stephen Hofmann, J.D., CPA, CFP®, is an AVP, Wealth Advisor & Investment Officer, with Alpine Trust & Investment Group.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

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