Picture this, you are on a rocket ship but with limited fuel. It is fun while it lasts but you need to plan now for when the fuel runs out. This is exactly what it looks like for professional athletes. Athlete wealth management is as much art as it is science. It is a combination of understanding the nuances and having deep expertise to help professional athletes manage, protect, and build wealth to last decades. I know this world because I lived this. I was the 9th overall pick in the 2009 MLB draft going from having a few hundred dollars in my bank account to millions overnight. I saw teammates struggle with sudden wealth and have seen the various pitfalls professional athletes fall victim to. In this article, we are talking about the six key areas every player should consider when it comes to athlete wealth management. Athlete Wealth Management The elements of an athlete's financial life consist of the same six components as everyone else: Financial Team - The who, what, and why of the team. Cash Flow - The direction given to income being earned. Tax Planning - The strategies implemented to reduce your lifetime tax bill. Risk Management - The protection against the things we cannot see. Estate Planning - The asset protection, tilting, and direction of wealth. Investments - The growth engine needed to help athlete reach their financial goals. While the components remain the same ~ the people, strategies, tactics, and solutions look far different. That is why athlete wealth management requires a specialized team of people with deep expertise to serve professional athletes. Financial Team "If you want to go fast, go alone; if you want to go far, go together." - African Proverb This rings true when it comes to athlete wealth management. It takes a team of specialized individuals working together to ensure success. Let's break down the who, what, and how of each team member. The Who An athlete's financial team should consist of at least five professionals. Financial Advisor Certified Public Accountant (CPA) Property & Causality Agent Life Insurance Agent Estate Planning Attorney Remember, each of the five areas (cash flow, tax planning, risk management, estate planning, and investments) needs an expert to lead the charge. The What We understand the core five team members but what is the role each team member plays? Financial Advisor - This is the point person advising, coordinating, and managing each element of your financial life. At Moment Private Wealth we serve as the main contact point for our athlete clients. Certified Public Accountant - Taxes are an athlete's single largest lifetime expense. It is the role of the financial advisor and CPA to work together to ensure every strategy is explored to lower an athlete's tax bill. Property & Causality Agent - The average professional athlete moves several times a year shifting between cities, apartments, and homes. This means multiple policies, things to protect, and specific home/auto/umbrella coverages are needed. The property & causality agent is the point person for ensuring proper coverages are in place. Life Insurance Agent - Professional athletes take on life at warp speed. The most formative years of their adult life (20-30) are while they are playing. This often means massive wealth creation and increased family responsibilities. Life insurance plays a key role in planning for family protection and ultra-high-net-worth legacy strategies. Estate Planning Attorney - Professional athletes are in the spotlight and with that comes increased risk and reduced privacy. The estate planning attorney is the expert in helping athletes protect, direct, and shield assets. The goal of an athlete's financial team is to bring a team of experts together in one place. The How You understand who is on the team and why they are on the team but how do you choose the team? To be frank, there are a lot of bad actors in the athlete wealth management industry. These five criteria can help you choose who should have a place on your financial team. Expertise - You are looking for someone who can provide level-three advice. They have lived it ~ they have done it themselves ~ they have helped guide others through it. Experience/Credentials - As a professional athlete, you want an experienced and credentialed team. At Moment Private Wealth, our athlete's financial team consists of advanced designations such as a CFP, CPA, CLU, & JD on every client's team. Service Model - A generalist financial advisor is not going to cut it for a professional athlete. You need a team that specializes in athletes and ultra-high-net-worth planning. Independence - You want to ensure the advice you receive is in your best interest, and free of conflicts. Finding an independent financial firm best positions this. Fit - The average financial firm serves clients with an average age over 60 and services several hundred per advisor. At Moment Private Wealth, we keep our client-to-advisor ratio small and our average client age is reflective of the professional athletes we serve. _____ Simply put, your financial team should specialize in you ~ the professional athlete. As financial advisors for professional athletes, we build, coordinate, and hold accountable all the members of an athlete's team. This allows you as the athlete to keep your focus on the field. Cash Flow You can only do three things with money ~ save it, spend it, and give it away. Seems simple enough? The problem? As a professional athlete, the typical financial advice need not apply. You are balancing accelerated earnings with a career whose lifespan could last just a few years. As specialists in athlete wealth management, we help athletes navigate the unique planning that comes with a career. Lifestyle Purchase vs. Reward Purchase You can buy anything but can you afford it? That is the question you must answer as an athlete. Let me explain... A lifestyle purchase is something that you can sustain forever. Example - An athlete budgets to buy a new car every five years. A reward purchase is something that you make one time. Example - An athlete buys his dream car after signing a new contract. Cost of Being You Basing an athlete's savings goals off of a percentage of yearly salary is a recipe for disaster Instead, we must understand the cost of being you. If the income dried up tomorrow, what would it cost to keep living the same lifestyle you are today? We aim to answer that question first and then work backward to determine what percentage we should save versus what we should spend. Example: An athlete earning $5,000,000 after tax saves 40% of his post-tax income or $2,500,000. By normal standards, this is a great savings rate. Yet what I see is an athlete who requires $2,500,000 in income to sustain his lifestyle. From there, we want to work backward and understand how much money we need to save to continue living that same lifestyle. If an athlete can reach those nest egg goals, great! If not, we need to have an honest conversation about cutting spending. _____ This is why I always preach to build the lifestyle slowly. The goal is to be able to keep living the same (or better) lifestyle after a playing career ends. The key to that is understanding what you should save, what you can spend, and what you can give away. Tax Planning You want the good news or the bad news? Alright, bad news first ~ Your single largest expense as an athlete will be your tax bill. The good news? You can plan around it and reduce it. Types of Income To understand taxes you have to understand the types of income you can make as a professional athlete. 1099 Income - This is the money that you make off the field (endorsements, signings, sponsorships). W2 Income - This is the money that you make on the field (salary and bonus from the team). The next step is understanding how we want to think about this income. Current Year vs. Future Year In athlete wealth management, we are always thinking about the current year versus the future year's benefits. Much of this depends on what tax rate you are in as an athlete. Current Year - This means you are getting a tax benefit in that given year. Future Year - This means you are getting no current year tax benefit but you will get a future year one. Example: If you are receiving a large signing bonus or in the midst of a free-agent contract we want to focus on the current year. If you are in a gap year (lower income) our focus shifts to future-year benefits. Once we understand what our focus is, then we can narrow down which strategies to use. Strategies The challenge with professional athletes is there is no one size fits all when it comes to tax planning strategies. Yes, we want to reduce your lifetime tax bill but we also want to always ensure those strategies are getting you closer to meeting your specific goals. Here are some of the most common strategies athletes need to consider: State Residency Legacy Planning Charitable Giving Contracts Structures Tax Efficient Investing Retirement Accounts Duty Day Calculations Tracking Deductions/Expenses _____ We have helped athletes save hundreds of thousands of dollars with proactive tax planning. This takes a deep understanding of athlete wealth management. You are filing in multiple states, dealing with countless cities, and need to ensure you are not leaving the IRS a tip. So remember, while taxes will be your largest lifetime expense you can and should be planning around them. Risk Management Anyone can Google your name and find out just about any piece of information they want. Your career is played at the highest level while putting your body on the line every day. That lack of privacy and increased career risk requires an insurance strategy to match. The three forms of life insurance every athlete should be aware of: Property & Casualty Insurance These policies protect your home, cars, and excess liability. Said another way, it protects you if the stuff you don't think will happen ends up happening. Auto Insurance - Just like it sounds it covers your vehicles. Home Insurance - The protection for one of your biggest assets. Renters Insurance - The policies that cover all those short-term rentals. Umbrella Insurance - The overarching protection that covers you if all other coverages are maxed out. You are traveling the country in the spotlight at all times. Do not, I repeat do not look for the cheapest policies. Instead, look for the policies that provide you with the best value (price + coverage). Life Insurance Life changes a lot from draft day. I went from having no one depending on me to being married with four beautiful kids. I want them to be protected should something happen to me. That is the goal of life insurance ~ transfer the risk from you to the life insurance company. Two Key Types: Term Life Insurance - This covers you for a certain period of time (think 10,20 or 30 years). Permanent Life Insurance - This covers you for your entire life (assuming premiums are paid). Insurance is just that, insurance. It is not an investment. You will be pitched countless "insurance ideas", always revert back to rule number 1 ~ If you don't understand the costs, fees, and structure don't do it. The starting point for life insurance is determining your need. What risk do you want to eliminate? Then determine what the is the best solution for you to solve that need. Specialty Insurance A professional sports career is like a piece of antique glass, valuable when fully intact but much less valuable if broken. We want to ensure you give yourself the best chance to cash in your skillset. Oftentimes this means transferring the risk that the glass could break to the insurance company. Specific Injuries Loss of Future Value Permanent & Total Disability These policies are hyper-specific to you and your situation. It is paramount you work with an advisor who specializes in athlete wealth management to ensure you are presented with all of your options. _____ Insurance is important. It is also misunderstood and misrepresented to professional athletes. You want to find someone who can provide advice but has no conflicts of interest in selling you a specific insurance product. At Moment Private Wealth, we advise on but make no money on insurance products. Simply put, this provides you the athlete the best possible advice conflict-free. Estate Planning I don’t like financial jargon ~ You know like “Estate Planning”, the first time I heard that I thought, “Isn’t that what old people do?” Well, let me ask you this… Have you worked hard to earn money from your sport? Do you want to make sure that money is protected? Do you want that money to have a future direction? If you are anything like me, your answer is a resounding yes. That is all estate planning is at its core. You see you get one of two options with your money ~ The Government Plan or Your Plan. Estate planning is the broad term for how you do this. So, let's break down the key factors to consider for professional athletes. Direction Guardianship - Who will take care of those in your legal care? Medical Directive – Who will make health care decisions if you can’t? Financial Directive – Who will handle your financial decisions if you can’t? Revocable Trust – Who will receive your money when you die and how will they do that? Pour Over Will - Where will all those key belongings go that aren't able to be titled in your estate? Consider your estate plan as the parking garage that houses your things. The direction is the guard at the exit to make sure those assets go where, when, and how you want. Protection Everyone can Google your name and figure out how much money you make. That level of public information requires proper protection. The parking garage you build around your assets (estate plan) provides you with the necessary protection. In athlete wealth management, we focus on the trust owning as much as possible while the individual (you) owns as little as possible. In reality, you still own and control those assets but from a legal perspective, there is separation. Titling The most common mistake I see is professional athletes do the work to build the parking garage. Documents are drafted and signed but the assets are never parked in the garage. Let me be clear, without proper titling of your assets those documents are paperweights ~ they do nothing. The key is ensuring your financial team helps you consider what assets should be titled in your trust and helps you execute that. Taxes The two knowns in life are death and taxes. They are inevitable and everyone knows it. What most don’t know is the government can tax even after you die ~ this is called Estate Taxes. Estate taxes work like this: The government takes a snapshot of everything you own upon your death, including any life insurance. Any money over $13.61M at the time of your passing is taxed at 40%. _____ As a professional athlete, you have the advantage of planning for this decades in advance. Done correctly you can limit or potentially avoid these taxes. So remember, when I said I thought estate planning was for old people? Ya not so much, when it comes to athlete wealth management it is a key component from day one. Investments On one side you have the advantage of the greatest superpower that exists with investing, time. On the other side, you have the disadvantage of a laundry list of unknowns. What does next year look like? What will my contract situation be? What would I do if my career stopped tomorrow? Investing for professional athletes is a constant tug between a decades-long time horizon and a day-by-day career. The best decisions always start with the end in mind. Consider this, your career ends, and your investments provide these two things: 1.      The flexibility to choose what you want to do next. 2.    The optionality to decide what that timeframe looks like. In the simplest form, this is the perfect outcome when investing money for athletes. You turn your future unknowns (an inevitable part of being an athlete) into something you control. Consider your investments in three buckets. 1)      War Chest – The investments that will be there for you no matter what. The returns are lower but the known is higher. Cash Bonds Private Credit 2)      Growth Strategy – The investments that will build long-term wealth while protecting the snowball you have built. Stocks Real Estate 3)      Aspirational Strategy – The investments that could be home runs but could be strikeouts. Private Equity Venture Capital Business Ventures Simply put, your core portfolio consists of buckets 1 and 2. You need enough there that can sustain your lifestyle forever before diving into bucket 3. Consider this, Warren Buffett has a net worth of $136 billion. More than 97% of that or $133 billion came after his 65th birthday. Buffett didn’t suddenly realize something he had previously missed. In fact, he didn’t do anything different. He just let time continue to be his superpower. Compounding is funny, it is hard to see until it is impossible to ignore. 8 + 8 + 8 + 8 + 8 = 40 8 x 8 x 8 x 8 x 8 = 32,768 See what I mean? _____ Athlete wealth management is about approaching investing like this: What is a good (if not great) rate of return we can sustain for the longest possible period in time? To win the game of investing, you just need to stay in the game long enough. After all, time is your greatest superpower. _______ Here is the deal ~ managing your wealth as a professional athlete from the start matters. You have one chance to do this right. Money mistakes you make are not like stubbing your toe, it is more like breaking your leg. You are on a rocket ship with limited fuel ~The best time to start looking at how to land that rocket is now. I say this because I have walked in your shoes. I made millions of dollars from the time I was 18 to 29 years old. I made smart money moves for a decade that set my family up for future decades. As specialists in athlete wealth management, we can help you do the same thing. If you are a professional athlete who is looking to find a financial team that specializes in you, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate any profit sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and entrepreneurs. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Client can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients? As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFA (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like? Our clients are nearly all athletes and entrepreneurs. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth and ultra-high-net-worth client in mind. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or entrepreneur interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Being a business owner is full of peaks and valleys. The journey through the valley has made you who you are today and you wouldn't change it for the world. After years of doing the hard thing you have built a successful business that has put you in a position where you have gone from building wealth to stewarding wealth. Wealth management for business owners is complex. In this blog, we will simplify the 5 key areas every business owner should know about. Wealth Management for Business Owners You are unique. You need advice that is tailored to you from a perspective that you can trust. Every good plan starts with a foundation. Here are the 5 foundational elements every business owner should have. Financial Planning - Building a plan with a clear roadmap to your goals. Tax Planning - Creating a lifetime tax strategy to avoid leaving the IRS a tip. Estate Planning - Giving direction for the assets you have and the people you love. Risk Management - Fortify your wealth to protect you from unknown risks. Investment Management - Build an investment strategy that complements your appetite for risk. Financial advisors are known to explain topics with words that are confusing and hard to follow. In this blog, we will educate you with simple and clear terminology you can understand. Financial Planning for Business Owners Back in the 90's before the internet was around road tripping was a thoughtful quest. Prior to your travel you would call up AAA and outline the route you wanted to take to your destination. Then they would mail you a map with your route outlined. This was your roadmap to get to the destination. The problem? You couldn't make adjustments on the fly. A financial plan is the same. This is not a set it and forget it plan, It is a living breathing document that changes as your needs and goals change. So how do we build out your plan? It all starts with determining our final destination. Often we see business owners fail to set a clear path forward. When you are setting goals we want you to think about them in the same way you build goals for your business. They need to have all the components of traditional SMART goals. Specific Measurable Attainable Relevant Time Bound If your goals don't have these characteristics it will always feel as though you are behind and chasing the next big thing. As a business owner, you are used to moving the goalpost. At times this can be helpful, but when you are building out a financial plan it is not. Once you have your goals it is time to build out the roadmap. The roadmap is going to have 3 inputs. Income Spending Saving Our goal when building this roadmap is to forecast what inputs we need to meet your goals. Building a roadmap should give you a clear picture of what you need to do today in order to get the desired outcome in the future. If you can't answer these questions your Trip Tik is off course. Is what I am saving enough? Is my spending at a level that I can sustain? Do I know what I need to do to reach my goals? Being able to answer these questions will put you in a situation to succeed. So remember financial planning for business owners is a GPS not a Trip Tik. Tax Planning for Business Owners Tax planning is a never-ending game of chess. There are always moves to be made both today and in the future. Our goal is that we pay our fair shares as a business owner but never leave the government a tip. How do we do that? We focus on two areas for tax planning. Future Year Tax Benefits - Strategies that help us pay less tax later. Roth Conversions Roth IRA Contributions Portfolio Optimization Present Year Tax Benefits - Strategies that help us pay less tax now. 401(K) Contributions Wage Optimization Tax Loss Harvesting So how do we know when to use a future-year strategy or a present-year strategy? It is my favorite answer. It depends. In order to determine which strategies to use it is about understanding where we are at today and where we are going in the future. Let's look at a real-life example that we can see both present and future year benefits pan out. A common situation we see for business owners is a high income for a sustained period of time with the culmination of a business sale. After the business sale, the income dramatically drops. Let's look at the case study of Joe. Case Study - Present Year Tax Strategy Joe is making $1,000,000 in his business and continues to get beat up by taxes. He is trying to determine what he can do to save money on taxes now because he is in the highest tax bracket. After looking at Joe's tax return it is clear that he is not optimizing his salary to maximize his qualified business income deduction. Joe is paying himself the following between wages and distributions. W2 - $100,000 Distributions - $900,000 This will result in a $50,000 deduction for qualified business income. The simplified way to think about this deduction is the lesser of 50% of W2 wages or 20% of distributions. After reviewing the situation we switch his W2 wages and Distributions to the following. W2 - $300,000 Distributions - $700,000 This tweak results in a $140,000 deduction for qualified business income which will reduce Joe's taxable income by an additional $90,000. This alone saved Joe in the ballpark of $30,000 in taxes. Now let's take a peek at a future year strategy. Case Study - Future Year Tax Strategy Let's continue on with Joe. Joe ended up selling his business 1 year ago and his new hobbies don't pay him any income. This results in Joe being in the 15% effective tax bracket. Joe has always invested in municipal bonds because they are tax-free and he was always in the highest tax bracket. With the dramatic drop in income, we reviewed if this was the best option moving forward. Current rates for taxable bonds are 6% while municipal bonds are paying 4%. After performing an after-tax yield calculation it is determined his municipal bonds are paying him a 4.7% taxable yield. This means that for every $1,000,000 Joe had invested in municipal bonds, he was leaving over $10,000 on the table. The solution is to optimize his portfolio by rebalancing from tax-free bonds to taxable bonds. There is no one-size-fits-all when it comes to tax planning for business owners. The key is to understand taxes are like a game of chess every move matters both for today and in the future. Estate Planning for Business Owners 99% of business owners we meet with are confused about what their estate plan says. Although there can be a lot of legalese in estate planning conversations typically we are trying to meet 3 primary goals. Give direction to your assets in advance. Give direction for how to take care of yourself and your loved ones. Save money on taxes. We can meet each of these goals by implementing an estate plan with these 5 core components. Trust Your trust is going to be the most important tool in your toolbox. First, what goes into a trust? Think about this as anything with a physical title. Examples of this are brokerage accounts, business assets, homes, and cars. Assets with a title are meant to go in your trust. This is important for two primary reasons. To Avoid the Probate Process To Give Direction to Assets First what is the probate process and why do we want to avoid it? Probate is the government's plan to distribute your assets for you. This process has many downsides. Let's just name a few. It is a public process Anyone can come make a claim to your assets A judge gets to decide where assets go It is costly, 5% of your assets typically You don't want this plan. The nice thing is that with a properly set up trust all this can be avoided. Our second primary reason is to give direction to assets. Unlike a beneficiary on a brokerage account, a trust can always have a backup. After all, you have worked your whole life to have the assets on your balance sheet. Don't you want them to go where you decide? Health Care Directive Our goal with estate planning is to leave nothing up to chance. This includes your health care. You have heard that without your health you have nothing. A health care directive is the best tool to allow you to control your path in the health care system. In your directive, you can state what type of treatment you want as well as treatment you do not want. Do you want life support - You Decide Do you want to be resuscitated- You Decide Do you want to be kept alive at all costs? - You Decide I imagine you would want to make these choices for yourself. Outside of this being helpful for you it is also helpful for your loved ones. No one wants to put a spouse, friend, or family member in a position where they have to decide whether or not to pull the plug. Guardianship You likely fall into one of these three categories. You have kids, you know someone with kids, or you want kids in the future. In all of these categories, you have witnessed a parent with unconditional love towards their kids. With this love, we want to ensure that we are taken care of. This is where guardianship for your kids comes into play. Every estate plan should include guardianship for minor kids. In this guardianship, you can direct specifically who will take care of your kids and how they will be taken care of. Pour Over Will The most common arguments that happen when distributing assets of an estate can be avoided with a pour-over will. A pour-over will can give direction to all of your assets without a title. Here are a few examples. Mom's wedding ring Dad's famous paintings The priceless family heirloom A pour-over will allows you to assign these assets to individuals to avoid any family disputes during the distribution process. Financial Power of Attorney Similar to a health care directive a financial power of attorney allows you to state in advance who gets to make financial decisions for you. When setting up a financial power of attorney it is important to understand there are two different types. Springing Power of Attorney - Your authority springs into action when an event occurs. Durable Power of Attorney - Your authority is effective immediately. When setting up a power of attorney know which document you are signing as it can have serious implications for you and your family. So remember estate planning for business owners doesn't need to be confusing. Lock down your legacy today with an estate plan that is tailored to your needs and goals. Risk Management for Business Owners Protecting your assets and your family from risks becomes a priority when there is more to lose. As your net worth increases the downside risk increases. Your risk management plan should cover two basic areas. Insurable Risks Uninsurable Risks An insurable risk is going to be one that we can buy insurance to protect against. These are the two most common insurable risks we see. Personal Liability Protection This type of insurance is going to protect you from a lawsuit brought against you. The most common situation we see is when someone is injured while you are driving a car or when a worker is at your home. We protect against this by having the correct liability coverage on your home, auto, and umbrella. More times than not we see business owners underinsured in this area. A good rule of thumb is to have your net worth covered in total liability protection. Life Insurance Protection Life insurance is there to protect your family if you can no longer provide for them. When we build out life insurance protection for business owners there are two needs we regularly see. Income replacement for your family. Buyout of your company shares from a business partner. Remember life insurance is there to protect your family on your worst day. It is not there to be your highest performing asset. An uninsurable risk is one that a business owner can't use insurance to protect against. Although you can't use insurance to protect these risks they are equally as important. These are the two most common uninsurable risks we see. Bad Investment in Your Business Investing in your business has gotten you to this point, but when is enough enough. One of the most common risks we see for business owners is investing too much money into an ineffective deal. This could include a new verticle in your business or even going all in on your current profit center. Exposing yourself in your business can happen, but with proper guidance, you can avoid this situation. Poor Debt Management Leverage can be the catalyst you need to take your business to the next level. Many business owners have used leverage to their advantage. Debt can be like playing with fire. One wrong move and you have set your business on fire. When you are playing with fire you need to know why you have the debt and what your plan is to get rid of it. Don't get caught in debt payments and let it ruin your business. Risks are everywhere in life. A risk management plan for business owners should be unique. Tailor your risk management plan to your needs. Investment Management for Business Owners You built wealth by concentrating. At some point in time, your largest asset was your business. That could be today or it was at some point in the past.. Concentration is the best way to build wealth and it is also the fastest way to lose wealth. Our job isn't to try and hit another home run. You have already done that. Our job is to diversify and keep you rich. We simply investment portfolios into 3 fundamental buckets. The War Chest – The bucket that we have for peace of mind. The Growth Strategy – The money you have set aside for long-term investments. The Aspirational Strategy – The money you have allocated for higher-risk strategic investments. Let's look at what goes into each one of these buckets. The War Chest The war chest is our safest money. These are the assets we need to protect. The way we do this is by investing in assets we know will be there for us in the short and long term. Money Markets Municipal Bonds Corporate Bonds Government Bonds We can determine the amount that needs to go into the war chest by referencing our financial plan for business owners. The Growth Strategy The growth strategy is what is going to keep you wealthy. As much as we would love to lock everything in the way chest that would not be a sustainable way to compound wealth. The assets in our growth strategy are going to be long term investments that we will focus on growth. Typically these investments include: Diversified Public Equities Public Real Estate Investments Public Alternative Investments These investments will have significantly more volatility than the war chest but they will also have significant growth opportunities. The amount in this bucket will be determined by your financial plan along with your risk tolerance. The Aspirational Strategy This is our legacy bucket. These assets will be the most aggressive investments and are assets that we don't need to meet our financial planning goals. Often these assets will be illiquid and have a risk of losing some or all of your principal investments. The types of investments we see in the aspirational strategy are the following. Private Equity Investments Venture Capital Investments Private Real Estate Deals Buying a Small Business These are the sexy investments that everyone wants to be a part of, and the reality is they have the highest chance of outsized rates of return. Like anything in life, there is no reward without risk. It is our job to help you navigate these waters and ensure you have the proper amount in this bucket based on the risk you want to take and the ability you have to take risks. So remember investment management is not a one size fits all. When it comes to investment management for business owners you need to take a customized approach to ensure you are effectively allocating money. If you are a business owner who is looking to find a financial team that specializes in you, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Are you a fiduciary? Moment Private Wealth serves clients as a fiduciary 100% of the time. How does Moment Private Wealth make money? We are only paid in one transparent way, by our clients. We receive no kickbacks or participate in any profit-sharing arrangements. Our fees are simple, transparent, and clear for our clients. How are you different than other financial advisors? We are specialists in working with professional athletes and business owners. We limit the number of new clients we take on. This allows us to provide unparalleled value and highly personalized service to professional athletes and business owners. We work as a team to service our clients. We believe in building a team of “A” players. This ensures our clients receive world-class tax, estate, insurance, and investment strategies. We focus on educating first, then executing. Where do you hold my investments and how can I see them? Moment Private Wealth uses Fidelity Investments as a third-party custodian for our client investment accounts. As a third-party custodian, Fidelity safeguards and provides reporting to you and the IRS each year. Clients can also access all financial information via the Moment Private Wealth Client Portal. How do you work with other members of my team? We believe in the power of the team. For most of our clients, their team consists of Moment Private Wealth, an accountant, an attorney, a banker, and an insurance specialist. We help our clients build out their team of individuals or work with existing partners clients have. Our goal is to ensure every family has a team of experts to protect their interests. How do you choose investments for clients? As independent financial advisors, we can gather research and make recommendations based on all available options. We determine clients’ portfolios in partnership with some of the largest asset managers in the world. Each quarter, we have calls with teams of CFAs (Chartered Financial Analysts) to ensure our clients are receiving the most up-to-date strategies and recommendations. What does your average client look like? Our clients are nearly all athletes and business owners. Our average client has a net worth greater than $5M. The strategies, solutions, and planning that we implement have a high-net-worth andultra-high-net-worth client in mind. Does Moment Private Wealth help you pay less in taxes? Taxes are going to be your largest lifetime expense. Our goal is to help you pay the least amount possible and never leave the IRS a tip. Our team of specialists understands this and works to reduce your taxes today and in the future. Can Moment Private Wealth help business owners with succession planning? Yes, this is part of creating a roadmap for your goals. Having first-hand knowledge of selling a business will allow you confidence throughout the process. Many business owners get one chance to sell a business. Having a firm that can help is key. Why should I consider hiring Moment Private Wealth? Great question! But first, let us explain why you shouldn’t hire us. If you’re looking for an advisor who will pitch shiny object investments or be a “yes man” you are in the wrong place. Why? Because we believe in being truth tellers and only giving advice that we take ourselves. The investments, strategies, and planning we do are all things our advisors do with their own money. If you are an athlete or business owner interested in things like lowering your tax bill, investing smarter, and finding a trusted partner we might be a good fit. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

For some of you reading this blog, you have had a loved one pass away. You know that those days are truly some of the darkest. Today we are going to outline a tool you can utilize to protect the people you care about most. Life Insurance Life insurance often has two spectrums of consumers. They either love it or they hate it. Today we are going to focus on education. Why should we buy life insurance? When should we buy life insurance? Specific examples of the benefits of life insurance? These are only a few of the many questions you will get answered when reading this blog. Let's dive in. Why do we buy life insurance? There are many applications for buying life insurance. Today we are going to break down 3 of the most common. Each of these has a unique solution we are trying to solve for. The common thread that runs through each of these is that you almost never expect each of these to happen in an instant. On your worst day, we need your family to be protected. 1. Supplementing Income For Your Family Life insurance serves as a crucial income replacement tool, guaranteeing that your family's financial needs are met in your absence. Case Study: John's Income Replacement John, the primary earner in his family, understands the significance of financial protection for his loved ones. He has created a great life for his family. Over the course of many years, he has built his business to the point in which his wife can stay home with his kids. He has upgraded his lifestyle with a new house and cars. John is proud of the life he has built for his family. John begins to wonder what happens if he is no longer around to provide for his family. This is when he starts considering insurance. The Need: A lump sum of money to allow his family to continue living their life. John also has voiced he wants to be able to pay off his mortgage and all liabilities. His goal is to allow his family to live the same life they are living today without any additional income from his wife. After speaking with his advisor they determine this is $3,000,000 of life insurance. The solution:  After a deep conversation about John's need for life insurance his advisor recommends a Term Life Insurance Policy. Let's look at the pros and cons of this type of policy. Term Life Insurance Summary: A term life insurance policy allows you to pay a specific dollar amount for a specific number of years to get the right to a specific death benefit. Example: $3,000,000 Death Benefit 20 Year Term $1,200 annually This means that as long as you pay your $1,200 dollar premium every year your family will receive $3,000,000 of death benefit if you die anytime within the next 20 years. 2. Buy-Sell Insurance for Entrepreneurs For entrepreneurs, life insurance facilitates a seamless transfer of ownership in the event of a partner's demise. Case Study: Sam and Michael's Business Agreement Sam and Michael, co-founders of a thriving tech startup, recognize the importance of safeguarding their business interests. What started as a project in college has turned into a multi-million dollar operation. Their most recent unsolicited LOI recently arrived from a national private equity firm. When they saw the number they immediately saw the problem. We have a big issue if one of us passes away. We do not have the financial means to buy the other partner's shares. The Need: When you own a business with a partner it is key to ensure the business continues on if one of you suddenly passes away. The best way to protect from this happening is planning. The solution:  After reviewing each of their personal balance sheets we determined neither had enough liquidity to afford the shares of the business. After discussing the different types of insurance we have determined that we do not need cash value but rather a death benefit that can purchase the shares. Term Life Insurance Summary: A term life insurance policy allows you to pay a specific dollar amount for a specific number of years to get the right to a specific death benefit. Example: $5,000,000 Death Benefit 10 Year Term $1,000 annually This means that as long as the company pays the $1,000 dollar premium every year your partner will receive $5,000,000 if you pass away. He can use these funds to purchase the shares of the company. When you execute a buy/sell agreement it is key to ensure the beneficiaries are set up properly and it is legally documented in a buy/sell agreement what will happen if you pass away. Without proper legal documentation, this could be a nightmare. 3. Estate Tax Planning Life insurance serves a critical role in estate planning by furnishing liquidity to cover estate taxes and preserve family wealth. For more information on estate taxes check on this blog. Case Study: Sophia's Estate Planning Strategy Sophia, a prosperous entrepreneur, meticulously structures her estate plan to plan for estate taxes. Today her net worth is $30,000,000 well over the $13,610,000 lifetime exemption. She realizes her estate tax bill is going to be millions of dollars and wants to do something about it. The Need: When you have a net worth over the estate tax limit you need to plan for estate taxes. In this scenario, she is going to owe approximately $6,500,000 in taxes at her death. The solution:  There are two components to this solution. The first is the insurance policy. We would look into a permanent policy for this need. TWe are not solving for a known time frame but rather a a need for a lifetime. The second is how we own the policy. Let's look at both. Permanent Life Insurance Summary: Permanent insurance has multiple choices that we could look at, but today let's focus on whole life insurance. For this type of solution, we pay a premium for our entire life to get a death benefit that is guaranteed for life. Other benefits to this type of policy include cash accumulation and the ability to borrow against the cash value of the policy. Example: $6,500,000 Death Benefit $50,000 Annual Premium Protects you for Life Note that your premium will be much higher in these types of policies and will vary dramatically based on how you design the policy. Just like selling your business, the terms are sometimes more important than the price. With a permanent policy, the design is more important than the annual premium. When you are executing a permanent life insurance policy for estate taxes it is key to ensure this is outside of your estate. Typically these are held in an ILIT (Irrevocable Life Insurance Trust). This is important because if you do not have the policy outside of your estate it will be subject to further estate taxes. ------------------------------------------------------------------------------------------------------------------------------ At Moment, many of our clients want to protect themselves on their worst days. We have found that life insurance can be confusing. This is why we educate first. If you are confused about your life insurance policies and want answers schedule a call, and talk with a Moment founder. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

When you are dealing with investment portfolios we are talking about matters of opinions vs matters of fact. Our goal when we construct portfolios is to leave as little up to chance as possible. After all, the fewer variables there are the better we can predict the outcome. So how do you eliminate variables in an investment portfolio?  You need to simplify your thinking. We simply investment portfolios into 3 fundamental buckets. The War Chest – The bucket that we have for peace of mind The Growth Strategy – The money you have set aside for long-term investments The Aspirational Strategy – The money you have allocated for higher-risk strategic investments Today we are going to take a minute to look at what factors we take into account when customizing an investment portfolio for a client. What is an investment portfolio? Before we dive into our three buckets let's define what an investment portfolio is. Your investment portfolio is a combination of all the assets on your balance sheet that you invest money into. This includes the following. Equity In Your Business Rental Real Estate Public Market Investments Private Market Investments I see many families make the mistake of thinking about their investment portfolio as the assets that an advisor manages. This is a sub-optimal thought process because, at some point in time, your largest asset was or is your business. Why wouldn’t we include this in our investment portfolio? Now that we have a definition of an investment portfolio let's dive into the 3 buckets your assets can fall into. Bucket 1 - The War Chest You have done the hard thing and won the money game. When you win the money game you want to protect what you have and make sure you never lose it. The assets that you need for peace of mind we would bucket into the war chest. Now how do we determine what investments and how much goes into the war chest?  My favorite answer: It Depends. These 3 questions will help determine what needs to go into the war chest. How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? What are my known needs in the next 5-7 years? Why are these the magic questions?  First, our war chest is the money we need to have no matter what. Typically in this bucket, we will put 5 to 7 years' worth of your living expenses. The reason this is the case is most market cycles happen in a 5 to 7 year time frame.  We want to have assets that no matter what is happening in the market we never have to sell investments at a loss. This war chest is our peace of mind. What types of investments go into our war chest?  These are typically investments that we are generating yield from and have little to no volatility. Money Markets Municipal Bonds Corporate Bonds Government Bonds Private Credit These are the types of investments we will look to place into bucket one. Now that we have our war chest let's move on to bucket 2. Bucket 2 - The Growth Strategy The next bucket we look to fund is our stay-rich money.  Remember if you are reading this you probably have won the money game or are on your path to winning the money game.  Our job isn’t to get you rich again our job is to keep you rich. The way we do that is by focusing a portion of the portfolio on Growth.  How do we determine what we should have in bucket 2? How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? How much risk am I willing to take? Note that the first two questions are the same as bucket one. Without knowing these fundamental answers it is nearly impossible to build a tailored portfolio.  The key to bucket 2 is risk.  The reason we have 5-7 years of living expenses in our war chest is to allow us to let our growth assets have time to grow. 75% of the time the market goes up in value, but this means that 25% of the time it does not. We never want to get over our skies and end up needing money in bucket 2 in a year the market has dropped. Think about the great financial crisis of 2008-2009 or COVID in 2020.  This was a time to rebalance into equities, not a time to need cash from bucket 2.  Those who stuck with the course ended up in a much better place than those who panicked. What type of investments go in bucket 2: Diversified Public Equities Public Real Estate Equities Public Alternative Investments Each bucket will be specific to you. Make sure you have a portfolio that is tailored to your needs. Bucket 3 – Aspirational Strategy The last bucket we fund is the aspirational bucket. This is the money that you don’t need to live your lifestyle. If we combine buckets 1 and 2 we should never need to use any money that is in bucket 3 to fund the life you want to live. This is the money that we are trying to get outsized returns with and are fine putting at risk. How we decide on bucket 3 are these questions: How much does it cost to live my lifestyle? How heavily am I relying on my investment portfolio to fund my lifestyle? Can buckets 1 and 2 support my lifestyle in perpetuity? Once you have answered these questions we can back into how much we have left for bucket 3.  Now we have a decision to make. This decision is client-specific. How much of my excess do I want to put at risk? Are you going to buy another business? Do you want to invest in Venture Capital or Private Equity? Some entrepreneurs want to protect more assets and have less in bucket 3 and others want to invest their entire bucket 3 into more deals or businesses. Remember there is no right answer to the exact amount that can go into bucket 3 but there certainly is a wrong answer. The Wrong Answer: You overfund bucket 3 and risk money you need for the chance to make additional money that you don’t need to meet your goals. So what types of investments go into bucket 3: Private Equity Investments Venture Capital Investments Private Real Estate Deals Buying a Private Business Each one of these types of investments has a higher expected rate of return than buckets 1 and 2, but know that these buckets come at risk that 1 and 2 do not have. So remember your investment portfolio should be specific to you. There is no one-size-fits-all all. Financial advice for entrepreneurs is unique. Ensure your investment portfolio is designed around you. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you reach your ideal outcome. This is why we help construct portfolios for business owners. It isn't enough to know what tools to use but you need a team to help you implement. If you are an entrepreneur who is concerned about your portfolio, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

One of my greatest accomplishments in life was attending the University of Notre Dame. Thanks to hard work and dedication, I not only earned my undergraduate degree, but also my Master’s of Science in Finance. My time at Notre Dame was life changing and something I am beyond grateful for. As Lou Holtz said, “Those who know Notre Dame, no explanation’s necessary. Those who don’t, no explanation will suffice.” As with anything worth having in life, it comes at a cost. Education is extremely expensive and only getting more expensive each year. Look at the cost of tuition/room and board at a few of the most coveted Universities in the United States: ·        Harvard University - ~$83,538 (per year) ·        Yale University - ~$85,120 (per year) ·        Stanford University - ~$82,162 (per year) ·        Princeton University - ~$80,415 (per year) ·        University of Notre Dame - ~$80,211 (per year) In this blog, we are going to break down: Planning for education costs The tax implications opening an education plan What qualifies as an education expense for a 529 plan The benefits to starting an education plan even if your child decides not plan to attend. Let me introduce you to a 529 plan, a short and more efficient way of saying 'a tax-advantaged savings plan designed to help pay for education.' Let's break it down further. The 529 Plan There are two major types of 529 plans: 1) An Education Savings Plan – This plan allows an individual to contribute money into an investable account, growing TAX FREE, to be used for qualified expenses including tuition, fees, room and board, and other related costs. More importantly, this plan allows for education benefits for those K-12. 2) A Prepaid Tuition Plan – Although less common, this plan varies in specifics, but allows an individual to lock in tuition at the current rate for a student who will not be attending college in the near future. Keep in mind, these plans are not available for K-12 education like the 529 plan. Tax Benefits Opening 529 accounts is helpful for future education expenses, but understanding the tax advantages 529 plans offer is another crucial reason to incorporate into your financial plan. Here are a few: 1)     Contributions can be tax-deductible at the state level 2)    Earnings can grow tax free if used for qualified expenses (more on this later) 3)    Some states even offer matching grants or other incentives Qualified Expenses As mentioned before, earnings can grow tax free, but only if used for qualified education expenses. Those expenses include: Tuition Fees Books Supplies Room & Board Costs No College - No Problem So your son or daughter has decided they don't want to go to college...this is where the 529 plan is a no brainer. Despite the 529 education plan not being used for its original purpose, you have several options when using these funds including: 1)     Keeping the Funds for Future Education: This gives the recipient the flexibility if still interested in pursuing further education 2)    Changing the Beneficiary of the Plan: If the original beneficiary decides not to pursue education (or has leftover funds), you can change the beneficiary to another eligible family member without incurring taxes or penalties -Eligible family members include siblings, parents, grandparents, aunts, uncles and first cousins 3)    Using the Funds for Other Qualified Expenses: If the funds are not used by the beneficiary, you still have the ability to use the funds for additional qualified expenses including tuition for elementary or secondary public, private or religious schools and other apprenticeship programs 4) Roll 529 Plan to A Roth IRA in Beneficiaries Name: With the latest news coming out of the Secure 2.0 Act, 529 plan account owners can roll over 529 funds into a beneficiary-owned Roth IRA owned tax-free. The cap on this rollover is $35,000. It is clear these investment vehicles offer invaluable benefits for those saving for education. From tax advantages to flexibility in fund usage, 529 plans provide families with numerous tools to prepare for the future. ----------------------------------------------------------------------------------------------------------------------------- Education costs are only increasing. As a parent with children, there will always be the incentive to prepare our kids for future success and there is no better way than setting aside funds for them to pursue their educational dreams. Understanding the nuances of education planning requires time and effort. Our goal at Moment Private Wealth is to help you navigate the complexities that come with savings such as those for future education. We have the team to help you implement educations savings into your financial plan so your children can use their gifts to be a force for good in the world.

The standard operating procedure (SOP).  If you are a business owner you have craved for these to be part of your business.  Here are a few examples of SOPs you have probably wanted in your business. -          Employee onboarding SOP -          Customer onboarding SOP -          Customer service SOP -          Phone answering SOP -          Customer satisfaction SOP You are probably reading this and fall into two categories. I wish I had those. I am glad I have those.  These are the same two categories for your financial life.  In this blog, we are going to break down the standard operating procedure for your income. As income grows above and beyond your lifestyle you need further direction for it. -          Do I reinvest in my business? -          Do I buy a 2nd home? -          Do I max out our company 401(K)? -          Do I upgrade my lifestyle? -          Do I save for retirement? These are all valid questions that don’t always have the most straightforward answers.  Let's break into how we frame income planning for business owners at Moment. Standard Operating Procedure for Income Bucket 1 – Your Business This is the lifeblood of your income. Without your business, you have no income.  As they say, cash is king. It is the one thing you cannot run out of in your business. This is where we start the income planning discussion.  These are the questions we ask business owners who work with Moment. 1)      How are you using the cash in your business? 2)     Does your business growth strategy require cash? 3)     How much money do you need in your business to fund the operation? Once we can answer these questions we can determine what needs to stay in your business vs what we can take out.  Often we see business owners with significant cash positions in their business. There is nothing wrong with this as long as you have a plan. With the amount of cash determined for operating and growing your business, we shift to your personal financial life. This starts with bucket 2. Bucket 2 – Emergency Fund Once we have established how much cash we need to keep in your business we switch to your personal balance sheet.  First up is your emergency fund. In order to determine how much needs to be in your emergency fund we need to know how much it costs to be you. If you don’t know you need to start tracking it. Yes, this means you need to track your spending. Thankfully there are many great tools out there to make this easy for you. If you don't know what it costs to be you it is difficult to determine how much needs to be in your emergency fund. The worst thing you can do is put yourself in a vulnerable cash situation that is dependent on your business as your one income stream. So how much cash should you keep?  The true answer is it depends, but as a good rule of thumb, we recommend 6 -12 months' worth of living expenses.  This should give you enough cushion if things start to go sideways in your business. Bucket 3 – Retirement Savings Once we have established your personal and business cash position we should start looking at investing money on your personal balance sheet. This starts with retirement savings. It is key that we get the first two buckets right before we move to the retirement buckets. These are going to be long-term investments. When we think about bucket 3 we are going to break strategies into two buckets. The first bucket provides us a tax benefit today and the second bucket provides us a tax benefit in the future. Accounts with a Tax Benefit Today: -          401(K)’s -          IRA’s Account with a Tax Benefit in the Future: -          Roth 401(K)’s -          Roth IRA’s So how do you determine if you should be investing for future tax benefits or current year tax benefits? It depends on a number of different factors. -          Your Age -          Your Tax Rate -          Your Timeframe This decision will be specific to you, but it is key to get it right. Investing in the right retirement accounts will save you thousands in taxes over the course of your life. To do it right you need to have a plan and consistently execute that plan. Bucket 4 -Taxable Investments Bucket four is going to be the main driver of your financial flexibility. Think about this as your most liquid investment.  These are traditional brokerage accounts where you invest in the stock market.  This bucket is a key to financial flexibility.  At the end of the day, you are running your business with the intent to create freedom of time. The most common mistake I see is a business owner pouring all of their additional funds into a brokerage account with no plan. Then a year later they decide they need to pull these funds out to grow their business, invest in real estate, or fund their lifestyle.  This is a long-term bucket. This mistake often leads to selling at inopportune times.  Funds that are invested in the stock market should be earmarked for long-term growth. With all these factors how do you determine how much income should be allocated to bucket four? -          How much money do you need in bucket four to meet your goals? -          How long do you have to save in order to meet your goals? -          How much additional income do you have left after funding buckets 1-3? This last question is a fundamental guide to meeting your goals.  If you have an excess of a million dollars after funding buckets 1-3 it doesn’t mean all of these dollars need to go into bucket 4. Rather it is an art, not a science. So if you have additional funds left over after bucket 4 where do these funds go? Bucket 5 – Private Investments Private investments often get prioritized too fast for business owners. After all the fastest-growing asset you own is your privately held business.  What many entrepreneurs fail to realize is that their asset allocation is already severely shifted towards private investments. Let me explain. For those of you reading this that haven’t exited likely your largest asset is your business.  If I looked at your asset allocation I would take this into account and see that you already have a large allocation to bucket 5. This is why we prioritize this last when we are allocating income from your business. Although private investments will have the highest chance for outsized returns remember there are cons to private deals. -          Risk – You can lose 100% of your investments. -          Liquidity – Your money is locked up and can’t be accessed. -          Time – Typical private deals have a 5 – 10 year time frame. These are all reasons to be cautious entering the marketplace but also the reasons why we would expect to get outsized returns. ----------------------------------------------------------------------------------------------------------------------------- Managing income is hard. As a business owner, there will always be somewhere you can invest money. The key is having a plan and sticking with it, if you are struggling with income planning that's ok. Moment Private Wealth was created to specialize. We have financial advisors for business owners like you who have walked in your shoes. Our goal at Moment Private Wealth is to help you avoid these common mistakes. This is why we help with income planning for business owners. It isn't enough to know what tools to use but you need a team to help you implement. If you are an entrepreneur who is concerned about income planning, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

When you are a business owner you are susceptible to many risks. If you are reading this you know this already, but you may not know if you are protected. This is why having a financial advisor who specializes in business owners is key. Business Owners who work with us think about risk in two ways. The Boat Sinkers Everything Else The goal when building a risk management plan is to start with the boat sinkers. This blog is going to give you a clear game plan to avoid the boat sinkers. Boat Sinkers Now that we have our brains thinking about everything that could go wrong. Let's look at the real-life examples we are going to explore today. Business Boat Sinkers: Forced to Sell Your Business Lawsuit Crushes Your Business Taxes Force G2 to Sell the Business Personal Boat Sinkers: Personal Lawsuit Costs You Millions Family Loses Your Income Creditors Take Your Assets Each one of these situations is a nightmare to deal with, but thankfully there is a solution to protect you from each of these events. Business Boat Sinkers Situation - You are forced to sell your business. Example You have been building your dream company for decades. You have built an amazing team and business with your business partner. One of you focuses on the vision while the other keeps the train on the tracks. One day your business partner informs you that he has a terminal illness. Later that year he passes away. Unfortunately, you do not have the capital to buy his shares of the business from his spouse and are forced to sell your business. Solution The most common solution is to execute buy/sell insurance. This is an insurance policy that is intended to pay out in one partner's death to buy his or her shares. - Situation - A lawsuit crushes your business. Example You are running a high-growth HVAC company. What started in your basement is now a multi-million dollar business. As you grew the business you focused on the main thing ~ growing revenue and serving clients. Unfortunately, you never looked at your commercial liability coverage until it was too late. Your company installed a hot water heater incorrectly at a home and it burned to the ground. Fortunately, no one was home but the homeowner is bringing a lawsuit. Solution Your business isn't stagnant. The proper liability coverage needs to be reviewed on an annual basis to ensure it is growing as your business is growing. - Situation - Your tax bill forces the next generation to sell the family business. Example The business you started is now an enterprise. Your goal has always been to pass the businesses down to the next generation. You believe you have covered all your bases. You spoke with your corporate counsel. You have executed a succession plan with your kids, but you never considered estate taxes. One day you suddenly pass. At that time your business has been valued at $50,000,000. Without proper planning, this leaves you with a $15,000,000 tax bill at your death. The only way to pay this tax bill is for the next generation to sell the family business. Solution Proper estate planning will avoid this situation. Often times the best solution is to have a life insurance policy in place to pay your estate taxes. Here is a video on how to avoid estate taxes. Financial advice for entrepreneurs is unique. Ensure your risk management plan avoids these business boat sinkers. Personal Boat Sinkers Situation - A liability lawsuit costs you millions of dollars. Example You are a busy entrepreneur. This doesn't stop things from breaking in your house. One day your roof is leaking and you text your neighbor to see if they have a recommendation. They send you their "guy" who is an expert and is a low-cost provider. This "guy" shows up at your house pops on your roof and slips. Fortunately, he only has a broken leg, but after googling your name he decides to sue you. Little did you know that he has no business insurance. Solution There are two key ways to protect yourself from these instances. The first is to ensure your home liability coverage has the proper coverage. Typically we see this being $500,000 of personal liability coverage. The next layer is an umbrella policy to protect you in the event of excess liability. - Situation - A family loses the income to fund their lifestyle. Example You have done the hard thing. You quit your W2 and started a business. During this time your income has grown to the point that your wife can stay at home with the kids. It is an amazing feeling to be able to support your family and allow them to have a great lifestyle. This is the first step in your business, but your business still relies on you working in the business. Unfortunately, you suddenly pass away and your income goes with you. Solution The simplest way to protect your family from loss of income is life insurance. Typically we see term insurance as the most cost-effective way to protect from this tragic event occurring. - Situation - Creditors take the assets you have passed to the next generation. Example You have spent your entire life protecting your family. Part of your plan was an estate structure to protect your assets. After you pass away your children receive all of your assets. One important detail you left out was a co-trustee for asset distribution. Unbeknownst to your son he needed to leave his assets in life trust to keep his creditor protection. After a failed startup venture the creditors can access the funds you passed down to him. Solution In order to receive creditor protection your assets need to be in life trust for your kids. This can be an easy win but needs to be set up and communicated to the next generation. Financial advice for entrepreneurs is unique. Ensure your risk management plan avoids these personal boat sinkers. ----------------------------------------------------------------------------------------------------------------------------- Our goal at Moment Private Wealth is to help you avoid these common mistakes. This is why we help with risk management for business owners. It isn't enough to know what tools to use but you need a team to help you implement. If you are an entrepreneur who is concerned about a potential risk, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Every investment you make has a tax consequence. Yet, how you navigate your tax bill should be specific to you. The key is aligning your desired outcome with a specific solution. If you are going to have a healthy relationship with taxes you need to be educated about how they work. In this blog, I am going to demystify taxes. Let's look at the 4 questions you are going to get answered in this blog. How do your investment products affect your taxes? What are capital gains taxes? How is your portfolio income taxed? How does your account type affect your taxes? 4 Tax Questions You Should Understand. 1) How do your investment products affect your taxes?? The first step in understanding tax efficiency is to understand what vehicles are out there and which are tax-efficient. Stocks and bonds are the two ways that you can own an investment. Stock - This is the equity of a company. Bond - This is the debt of a company. They both have their place in a portfolio but let's look at the tax-efficient way to own investments. How can you buy into stocks or bonds? Individual Stocks or Bonds Exchange Traded Funds (ETF's) Mutual Funds There are pros and cons to each of these in how you own them. When we look at taxes we want to own the investment that gives us the most amount of tax control. We want to control these three questions: When we are taxed? What tax rate we are paying? How much in taxes do we owe? The best vehicles for control are individual stocks or ETFs. These investments give us control to compound and avoid taxes, while mutual funds do not. Let's look at a real-world example. Exchange Traded Fund: If you own an ETF in your portfolio the only way you pay taxes is if you decide to sell shares. It doesn't matter if the fund manager buys and sells in the fund. The capital gains stay locked in your investment until you decide to realize gains. Mutual Fund: If you own a mutual fund in your portfolio you pay taxes when the manager buys and sells inside of the fund. This causes capital gain distributions at the end of the year. These are taxes that you cannot control. Tax-efficient investments start with the building blocks. Understand what you own and why you own it. Here is a visual that shows the potential tax drag certain funds can have on your investments. 2) What are Capital Gains taxes? Whether you own stocks or bonds you need to know how you are going to be taxed. An asset you own will be subject to capital gains taxes if you sell it in the future. There are two types of capital gains we need to unpack. Long Term Capital Gains vs Short Term Captial Gains Every asset you own will have fluctuations in the market. You need to understand how you are taxed if you decide to exit or sell an investment. Depending on how long you hold an investment will determine what tax rate you pay. Long Term Capital Gains apply to investments you have held for more than 1 year. Short Term Capital Gains apply to investments you have held for less than 1 year. Now that you know the holding period let's look at the tax rates. Long Term Capital Gains are taxed at capital gains rates. Maximum of 20% Short Term Capital Gains are taxed at ordinary income rates. Maximum of 37% With a 17% difference in tax rate knowing how long you have held an investment is a key to paying less in taxes. *Capital gains can also a net investment income tax of 3.8% for some high earners 3) How is your portfolio income taxed? Everyone loves passive income, including me. The income that you get for truly doing no work. The best passive income I have found is through investing in the stock market. Let's look at the different types of income you can receive. The two types we will unpack are dividends and interest. Dividends - These are payments from holding an equity investment. There are two types of dividends. Qualified Dividends Non-Qualified Dividends They are taxed in two different ways. Qualified dividends are taxed at long-term capital gains rates. Maximum of 20%. Non-qualified dividends are taxed at ordinary income rates. Maximum of 37%. Many factors will determine how a dividend is paid, but the most important thing to remember is that a dividend is qualified based on holding periods. Interest - These are payments from holding a bond investment. There are two types of interest. Taxable Interest Tax-Free Interest Taxable interest is going to be paid when you hold a corporate bond. A corporate bond is when you are holding a liability on a public company. Easy examples of these companies are Apple, Microsoft, and Walmart. All of the interest paid to you will be taxed at ordinary income rates. Tax-free interest is going to be paid when you hold a municipal bond. A municipal bond is when you are holding a liability on a municipality. Your school district needs a new HVAC system so they raise money through a municipal bond. All of the interest paid to you will be tax-free. Getting income from an investment is great, but what matters is what you are keeping. I have seen many clients fall into the "yield trap". This is where they are being paid a high yield only to be paying 50% of it to the IRS. 4) How does your account type affect your taxes? Which account to own investments in can be overwhelming. Although there are many types of accounts there are only 3 ways that can be taxed. Here they are: Tax-Deferred These are investments that receive a tax benefit today but will require you to pay taxes in the future. These are the types of accounts that are tax-deferred. 401(K)'s 403(B)'s IRA's Each of these accounts has its place in financial planning but it is important to remember the pros and cons. The #1 pro is that you will receive a tax benefit today. The #1 con is that these funds will be tied up and can't be used until a certain time or event occurs. Tax-Free These are investments that grow tax-free and they come out tax-free. These are the types of accounts that are tax-free. Roth IRA's Roth 401(K)'s HSA's You are probably thinking what's the catch with these accounts? The #1 pro is that these accounts are tax-free. The #1 con is that these funds are tied up and can't be used until a certain time or event occurs. This is where tax planning comes in handy. Tax-free accounts are all about delayed gratification while tax-deferred accounts get you a present-year benefit. Taxable This is your traditional brokerage account. The account that you will fill up with your savings post-tax. While there is often more talk about retirement accounts, taxable accounts are my favorite. Here is why: Provide instant liquidity Create tax assets for the future Ability to borrow against these funds When you look at your portfolio today do you have diversification in these areas? Managing how much you have in each tax bucket should be a driver in your financial plan. At Moment Private Wealth , we specialize in being financial advisors for athletes and entrepreneurs. For our clients, optimizing investment accounts is critical to ensuring we lower their lifetime tax bill. ------------------------------------------------------------------------------------------------------------------------------ If you are looking for a financial team that can help you get smarter with your money, lower your lifetime tax bill, and coordinate your financial life schedule a call to see if you are a fit. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Sometimes you are good and sometimes you just get lucky. When it comes to money moves one of the luckiest times in my life was when I first got called up to the big leagues. A baby faced 20 year old with more questions than answers. Some opportune guidance from a clubhouse manager ended up saving me serious money in taxes. "Do you know about the MLB 401(k) plan? You should look at contributing to that." That was my first foray into understanding retirement accounts, the tax implications, and how professional athletes can maximize them. In this article, we are going to break down what retirement accounts athlete should consider, the impact they have, and examples of how to maximize them. The Key Points Retirement accounts at their core are relatively simple. You make a contribution and the government gives you either a current year benefit (deferral) or a future year benefit (tax free growth). They do this to encourage families to save for retirement. Athletes retirement accounts at their core are no different but what is different is the tax rate, time frame, and impact those little decisions have. There are four main retirement accounts athletes need to think about: 401(k) - These are company sponsored plans that in 2024 allow you to contribute up to $23,000 pre tax and an additional $43,000 after tax. IRA/Roth IRA - These are individual retirement accounts that allow athletes to contribute up to $7,000 per year. The difference between a traditional IRA and a Roth IRA is the tax benefits. The traditional IRA gives you a current year tax benefit and taxes your money at distribution. The Roth IRA provides no current year tax benefit but provides tax free growth and distributions. SEP IRA - A simplified employee pension IRA or SEP IRA is a retirement account that allows athletes to contribute self employment income or "off the field" income. In 2024, an athlete can contribute 25% of their self employment income with a max contribution of $69,000. Solo 401(k)/Roth Solo 401(k) - Much like the SEP IRA this account is earmarked for self employment income or "off the field" income. Solo 401(k)s have the same contribution limits as traditional 401(k)s mentioned above. In addition, many providers have Roth Solo 401(k) options that provide no current year tax benefit but provide tax free growth and distribution. The Right Mix Understanding the types of accounts available is just step one in this process. Step two and arguable more important is understanding how to properly use these for a professional athlete. At Moment Private Wealth, we specialize in being financial advisors for athletes and are always thinking about the nuances that comes with these accounts. To better articulate how a professional athlete might mix these retirement accounts for maximum impact here is an example: The typical arc for a professional athletes is NIL money, a draft/free agent contract, a free agent deal and a post career plan. In this example we will walk through things to consider and the tax implications at each stage. - NIL Money: When an athlete is making NIL money the two biggest accounts that we often consider at Moment Private Wealth are Roth IRAs and Roth Solo 401(k)s. The reason for this is simple both of these accounts provide the biggest current or future year tax benefit to the athlete. Example: Athlete is earning $100,000 of NIL money. Potential Action: $6,500 Roth IRA contribution and a $23,000 Roth Solo 401(k) contribution. Reasoning: This athlete would be in the 22% marginal tax rate but their effective rate (the rate they actually pay) will be lower. There is a good chance this athlete will be in a higher future tax rate thus us wanting to maximize the future tax benefit (tax free growth) as opposed to the current year tax benefit (deferrals). - Draft/Free Agent Contract When an athlete is signing their draft contract their are three accounts we look most often look at. They are the Roth IRA and 401(k). Example: Athlete signs a contract for $5,000,000. Potential Action: $6,500 "backdoor" Roth IRA contribution and $23,000 401(k) contribution. Reasoning: This athlete would be in the 37% marginal tax rate and their effective tax rate would be in the high 30s as well. This means we would be looking to focus on current year tax benefits. The traditional 401(k) (if offered by the team) provides that current year benefit. The "backdoor" Roth IRA strategy is specific to high income earners and allows us to work around the income limitations usually associated with Roth IRA contributions. - Post Career Plan When an athlete is transitioning from his playing days to post playing we often see a dramatic decrease in their tax rate. This is an opportune time to maximize the structure of retirement accounts. Example: Athlete transitions from a tax rate in the high 30s to a tax rate in the high teens to low 20s. Potential Action: That athlete could look to convert or move money from traditional retirement accounts into Roth retirement accounts. Reasoning: There is a tax consequence when this conversion happens but often the athletes tax rate is at the lowest point in recent memory. This allows an athlete to potential take advantage of decades of tax free growth and distributions in a Roth retirement account. *Note - The above strategies are hyper specific to each individual player and why we always recommend working with a financial advisor for athletes. One that has deep understanding and specific expertise in helping athlete navigates the complexities that come with sports. Professional athletes face a unique career arc of low income to spiked income to low income. It is important that athletes understand the role retirement accounts play in reducing one's lifetime tax bill and increasing wealth creation. At Moment Private Wealth we specialize in being financial advisors for athletes. ------------------------------------------------------------------------------------------------------------------------------ Moment Private Wealth specializes in helping professional athletes and entrepreneurs build and protect wealth. Understanding the nuances of retirement accounts for athletes is at the heart of what we do as financial advisors to athletes and entrepreneurs. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

One of the most dangerous times for a pitcher is with two outs and the bases empty. As a pitcher, you have a laser focus on getting the lead-off batter out each inning. If you can do that the chances of a team scoring a run drop to just 16%. If you can get the next guy out the chances of a run crossing home plate drop to less than 7%. That breath you just took thinking, oh I see the big inning isn’t going to happen is when risk comes in. I can remember having two outs and two strikes on a batter only to find myself in a bases-loaded jam within a handful of pitches. While I had done nearly everything right and kept my focus there was still a chance of the big inning. That is the weird part about risk, we know it is out there but we typically only account for the obvious. We wear a seatbelt to protect against an accident. Yet we might not put it on if we are only going thirty seconds in the car. We get an education to make sure we get a good job. Yet we don’t consider that a sweeping layoff could be around the corner. We get regular checkups for our health. Yet we often make unhealthy choices thinking, “That outcome won’t happen to me”. Risk is as much a part of life as it is money management. Today, I want to talk to you about what I have learned about risk, how I approach it today and three things you can do to reduce it in your financial life. A Guide to Seeing the Unforeseen I have been investing for 15 years. In that time, I have seen the market crash and rebound. I have seen real estate plummet and rebound. I have seen the world shut down and rebound. You see the theme ~ a crash followed by a rebound. The thing you won’t see a theme with is the reason for the crash and the rebound. From the subprime mortgage debacle to a housing bubble to Covid, the results are the same but the reasoning is far different. The only thing in common among these three events is no one saw them coming in advance. Each one of those situations planted a seed that has helped me better understand risk. It has shifted both my mindset on risk and my tactical approach to reducing it. My Approach to Risk My approach to risk is both simple and complex. My starting point is the same as it is for my clients. It is a combination of my desire for risk multiplied by my need to take risks. Here is an example: If you have $20,000,000 and are living a lifestyle that costs $300,000 to maintain, your desire to risk might be a 10 but your need to take risks might be a 1. If you have $1,000,000 and are living a lifestyle that costs $300,000 to maintain, your desire to risk might be a 1 but your need to take risks might be a 10. You see risk should look different for everyone. It is a combination of art and science. Today my need to take risk has shifted down but my desire to take risk has shifted up. This has happened for a few reasons. Today, I have a clearer vision of my future money moves. I have also become better educated in the spaces that I play thus increasing my desire to take risks. Yet the thing that has helped me the most is understanding to accept risk as part of my life. The clearest example of this has been my desire to build up a war chest. A war chest is the term I use for my safe bucket of money. This is the money that will be there no matter what comes my way. The downside (and thing that kills me internally) is that money will never earn the rates of return my other buckets will earn. Yet it is equally as important if not more important than those other buckets. In summary, my approach to risk is somewhat simple. The thing that anchors this simple philosophy is having someone to keep me accountable. For me, my brother and business partner serves as my financial advisor. He gets the great pleasure of telling me, “That aligns with your risk or that is a shiny object to avoid.” While I don't always want to hear it, that second set of eyes has been invaluable. 3 Tactical Steps to Take There is no way to remove all risks from your financial life. Stuff money under your mattress and your house could still go down in a blaze of glory. Yet there are tactical steps you can take to reduce risk and increase your odds of staying in the game. Remember, the ultimate goal of investing is not great one-year returns it is staying in the game long enough to let compounding take effect. Build Your War Chest The money you place here gives the rest of your portfolio the ability to compound. It allows you to stick with your investments through those inevitable crashes and find traction on the rebound. It gives you the peace of mind needed to sleep at night when the train is seemingly off the tracks. Diversify The only free lunch in investing is diversification. The best part of diversification is you will drastically increase your odds of staying in the game and capturing a fair rate of return. The worst part of diversification is that it will always leave you wanting more. Your portfolio will be littered with things you want more of and stuff you want less of. Know the Game The number of ways to make money and invest money is endless. While the best investors may choose a different asset class they all have one thing in common. They focus on what they know. They are not playing someone else’s game. They are playing the game that tilts the odds heaviest in their favor. For the record, for most people that is a diversified portfolio tilted towards stocks. Risk is weird. We all know it is there but we often think it won’t happen to us. That is a dangerous mindset. Building and protecting wealth is as much about protecting your downside as it is maximizing your upside. ------------------------------------------------------------------------------------------------------------------------------ Moment Private Wealth specializes in helping professional athletes and entrepreneurs build and protect wealth. Understanding risk for our clients is at the heart of what we do as financial advisors to athletes and entrepreneurs. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Even the brightest stars can fall from the financial heavens when they neglect a rock-solid financial plan. Consider the cautionary tale of Mike Tyson, the legendary boxer known for his incredible prowess in the ring. With fame, fortune, and a seemingly endless stream of victories, Tyson was on top of the world. During the course of Tyson's career he netted $430,000,000 in purses and endorsements. However, today you can find stories of Tyson's declaring bankruptcy. Mike Tyson's story serves as a powerful reminder of the critical importance of comprehensive financial planning for entrepreneurs. Entrepreneurs, do you have a rock-solid financial plan in place to fuel your business journey? Financial planning is the backbone of entrepreneurial success. In this blog, we'll dive deep into each area, bringing them to life with stories to help you grasp their critical importance. The Entrepreneur's Financial Plan The financial plan is your entrepreneurial blueprint, mapping out your path to success. It comprises five critical elements: Cash Flow Tax Planning Risk Management Estate Planning Investment Management Neglecting any of these is like constructing a skyscraper without a foundation—risky and bound for trouble. 5 Components of Your Financial Plan 1) Cash Flow - Steering Your Entrepreneurial Ship Cash flow and what you do with it is equivalent to how you steer the ship through the ever-changing seas of entrepreneurship. Picture your financial journey as a voyage across uncharted waters, and your cash flow plan as the captain's wheel, guiding your ship through calm and stormy seas. Imagine yourself as the captain of a majestic sailing vessel, embarking on a grand adventure. Your ship represents your business, and the sea symbolizes the financial landscape. Just as a skilled captain charts the course, adjusts the sails, and navigates through unpredictable weather, cash flow planning involves steering your business through the financial challenges and opportunities that lie ahead. The entrepreneurial sea can be serene at times, with smooth sailing and a favorable wind at your back. However, it can also be turbulent, with rough waves and unexpected storms. Giving direction to your cash equips you with the expertise to make informed decisions, adjust your course when necessary, and ensure your entrepreneurial ship remains on a steady trajectory. Much like a captain who plans for fuel, supplies, and crew management you need to plan around your income. That involves forecasting income, managing expenses, and allocating resources strategically. It's your financial compass, guiding your ship toward financial prosperity and helping you avoid running aground. Moment Private Wealth specializes in being your financial captain, assisting you in steering your entrepreneurial ship with confidence. We understand that cash flow planning is essential for maintaining a steady course, and we're here to ensure your financial voyage leads to success. 2) Tax Planning - Navigating the Lifelong Financial Journey Tax planning isn't a one-time event; it's a lifelong strategy, much like maintaining a well-tended garden. Just as a skilled gardener tends to their plants throughout the seasons, tax planning requires continuous attention and care to ensure a bountiful harvest. Imagine your financial life as a garden that grows and evolves over the years. Tax planning is the process of nurturing and cultivating your financial landscape. Just as a gardener plans for each season and adapts to changing weather conditions, tax planning involves preparing for various financial phases and adjusting to ever-changing tax laws. In the world of taxation, it's not about winning a single game; it's about playing the long game. Much like a committed gardener who invests time and effort in planting, pruning, and harvesting, tax planning involves making strategic financial decisions throughout your lifetime. Just as a gardener learns from experience and refines their techniques, tax planning evolves as your financial situation changes. It requires ongoing attention to maximize tax efficiency, minimize liabilities, and ensure that your financial garden flourishes year after year. Moment Private Wealth specializes in being financial advisors to entrepreneurs. Ensuring your tax strategy is well thought out, proactive, and focused around your situation. We understand that tax planning is not a sprint but a marathon, and we're here to help you cultivate financial success that lasts a lifetime. 3) Risk Management - Fortifying Your Entrepreneurial Castle Consider risk management as the sturdy walls and defenses of your entrepreneurial castle. Just as a medieval fortress protected its inhabitants from external threats, risk management safeguards your wealth and business from unforeseen perils. Imagine your entrepreneurial journey as the ruler of a magnificent castle nestled atop a strategic hill. Your wealth, business, and loved ones reside within these walls, just as your assets are held within your business. To protect your kingdom, you must fortify the castle with walls, gates, and guards. In the same way, risk management involves creating a robust defense system against potential threats. The world outside your castle is filled with uncertainties – economic downturns, legal disputes, and unexpected emergencies. Just as a castle's defenses are designed to withstand assaults, risk management strategies are in place to shield your wealth and assets from these external dangers. Your entrepreneurial castle's walls symbolize insurance policies, legal safeguards, and contingency plans. These defenses protect your kingdom, ensuring that even during turbulent times, your wealth and legacy remain intact. Just as a vigilant castle guard watches over the gates, risk management professionals oversee your financial fortress, ensuring that potential threats are detected and neutralized. Moment Private Wealth specializes in being the architects of your financial fortress. We build and maintain the defenses needed to protect your entrepreneurial kingdom, ensuring that your legacy endures any storm that may come your way. 4) Estate Planning - Safeguarding Your Entrepreneurial Legacy Estate planning is the guardian of your entrepreneurial legacy, akin to a skilled conductor orchestrating a symphony. Just as a conductor meticulously directs each instrument to create a harmonious masterpiece, estate planning ensures that every element of your wealth and assets is harmoniously preserved and distributed according to your vision. Imagine your wealth as a grand musical composition, with different instruments representing various assets – your business, real estate, investments, and personal possessions. These instruments need a conductor to ensure they play in perfect harmony even when you're no longer present. Estate planning is the conductor's baton, guiding the distribution of your assets to create a lasting legacy. Like the composer who leaves detailed instructions for the conductor, your estate plan provides clear directives on how your wealth should be managed and distributed. It specifies who inherits your business, how your assets are divided, and how your philanthropic desires are carried out. Just as a conductor ensures that every note is played with precision, estate planning protects your assets from potential disputes and mismanagement. It ensures that your entrepreneurial legacy continues to resonate for generations, much like a timeless symphony that transcends time. Moment Private Wealth specializes in being the conductor of your estate plan, orchestrating the preservation and distribution of your entrepreneurial legacy with the utmost precision and care. Let us compose a legacy plan that ensures your life's work remains a symphony of success for your loved ones. 5)  Investment Management - Building Your Entrepreneurial Portfolio Investment management is all about constructing a diversified portfolio of business opportunities. Think of it as your entrepreneurial venture's architectural blueprint. Just as a skilled architect balances aesthetics, functionality, and structural integrity when designing a building, entrepreneurs must carefully weigh risk and reward in their investments. Consider your investment portfolio as a collection of buildings in a bustling city. Each building represents a different asset class, from stocks and bonds to real estate and private equity. Just as city planners allocate resources to ensure the city thrives, you must allocate your resources effectively among these asset classes to thrive financially. Now, imagine the city has both public and private real estate markets. The public market buildings are like well-established skyscrapers with steady rental income. They're less risky but offer modest returns. On the other hand, the private market buildings are like promising startups with the potential for exponential growth, but also higher risk. Optimizing your portfolio involves finding the right balance between these public and private market buildings. It's akin to being a real estate developer who strategically invests in both established properties and budding ventures. The goal is to create a resilient portfolio that can weather economic storms while capturing growth opportunities. Just as a developer carefully selects properties, you must consider asset allocation, investment costs, and tax implications. Like a developer who minimizes construction costs and navigates zoning regulations, you should minimize investment fees and optimize your tax strategy to maximize your financial gains. Moment Private Wealth specializes in helping entrepreneurs build their investment portfolios. We're the architects who design portfolios tailored to your unique needs, just as an architect customizes buildings to suit their purpose. Let us be your financial architects, crafting an investment plan that ensures your entrepreneurial vision stands tall and prosperous. ------------------------------------------------------------------------------------------------------------------------------ Entrepreneurs, your financial success is the key to unlocking your entrepreneurial dreams. Moment Private Wealth specializes in being financial advisors to entrepreneurs. Don't leave your financial future to chance. Our goal at Moment is that we are the guides on your journey to financial success. If you are an entrepreneur who is interested in a free financial blueprint, schedule a call, and talk with a Moment founder. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

In 2015, my Dad was running a business in my hometown of Saint Louis, Missouri. He had been running this business for over two decades. In late 2015, he received the news that he had an aggressive form of cancer and only a few short months later he had sold his business and passed away. It was an emotional time for our family navigating the new reality we were living in. One unfortunate result of my Dad his diagnosis was a forced sale with no succession plan. It caused additional stress and anxiety but also cost him being able to get fair value for two decades of work. In this blog, I am going to break down the 5 core components of a succession plan. Follow these steps to maximize your exit. What is a succession plan? Do you own a business? Then you should have a succession plan. If you aren't familiar with a succession plan, consider these questions. Can I afford to sell my business? Who do I want to sell my business to? Is this business going to be part of my legacy? Do I have the right people on my financial team? How do I want my employees to be taken care of? A succession plan is a way for you to answer all these questions on your terms. When you have a plan in place it allows you to minimize downside risk and avoid any surprises. There is no one-size-fits-all in a succession plan, but I can tell you firsthand that not having one is not good. After all, you have likely worked your entire life to grow your business. My first-hand experience is that you want to maximize it. Let's look at the components of a winning succession plan. 5 Components of Your Succession Plan 1) Who are you selling to? If you want to maximize your exit you need to understand who your buyers are. These are the most common answers. Family Employees Private Equity Strategic Buyers Each one of these buyers provides a unique value proposition. Selling to your family could maximize the legacy you leave. Your employees have provided tremendous value. How will you reward them? Private equity can maximize your financial outcome, but it may come at a cost. Strategic buyers could be a great way to get a second bite out of the apple. There is no one right buyer, but there are wrong buyers. Knowing your goals will help create a win-win for everyone involved. 2) Who is on your team? When you are looking to create a succession plan you need to know who is on your team. Your team needs to consist of experts in the space. Remember you may only get one shot at this. It is not the time to DIY. It is the time to find experts that can help you. Here are the people that need to be on your team. M&A Attorney Tax Professional Sell Side Banker Financial Planner Insurance Advisor You may have all, some, or none of these members on your team today. That is ok. The job of your team is to work together and help you find the right people for you. When you are building your deal team ensure that each member is holding each other accountable. Without teamwork, you can often find items falling through the cracks. 3) What is your ideal post-exit world? Remember that you hold all the cards. You don't have to leave or sell. This is why considering your ideal outcome in advance is key. Your ideal outcome is going to drive your decisions and your team's decisions. Clear direction will allow you to zero in on the right buyers. Are you looking to fully exit the company? Are you staying on board with the company? Are you looking to partially exit the company? Your ideal outcome can only happen if you have thought about these questions in advance. Remember time will kill your deal. If emotions are high and time is short that is not the time to make these types of decisions. Hours of your time will be saved in this process by avoiding conversations with the wrong buyers. 4) What does it cost to be you? Often overlooked by business owners is the cost of being them. After years of running their business, you will typically find many personal expenses that have become business expenses. There is nothing wrong with this if you factor it in. If you haven't you could be in a hurt of trouble. Here are the questions I would consider during succession planning. What does your lifestyle cost? Will this lifestyle change after you exit? How much of your personal life is funded by the business? Whether your succession plan is $1,000,000 or $100,000,000 you will have anxiety around your exit if you don't know the answer to these questions. Getting in front of your planning is the key to a stress-free succession plan. 5) What is your number? Every succession plan has a number. A key to making the right decision for you is knowing what that number is. Flying blind into these conversations without a number in mind will make the decision to sign on that dotted line even harder. You will almost always think the company is worth more than the number presented. Having your number will give you a clear mind. Can I continue living my lifestyle with this post-tax money? Does this amount of money allow me to meet my goals? Am I comfortable walking away for this amount? Putting together a financial plan is the ultimate tool for answering these questions. A financial plan will allow you to project what your number needs to be. When you have an answer to that question it will give you the peace of mind to know your number is the right one. At Moment, many of our clients have created succession plans. They have bridged the gap between what they have accomplished in business and what they need in their life. Knowing this answer has given them great confidence in moving forward with implementing a succession exit. If you are concerned about your succession plan, consider scheduling a call to see how we can help. ------------------------------------------------------------------------------------------------------------------------------ Our goal at Moment is that no business gets put into the situation that my Dad was in. The only out was to sell and to sell quickly. This is why we help with succession planning. It is the best tool we have to avoid a bad outcome. If you are an entrepreneur who is interested in succession planning, schedule a call, and talk with a Moment founder. Get in Touch With An Advisor *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.