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Investment planning differs from investment management in that planning is the process of preparing for management, whereas management is the act of making and overseeing said investments. This discussion therefore will focus on the process of preparing to invest rather than the investment process itself.

Let’s start with what Eunoia believes is the biggest personal investment planning mistake; separation of funds. As we move through life it’s natural, and somewhat inevitable, that we accumulate accounts held by different institutions. We may open new retirement accounts as we change jobs rather than rolling old accounts into the new. We may change banks and leave money in an IRA or investment account at the old bank. We may hear about a great broker and open a 2nd or 3rd investment account to try to boost our investment gains. At some point, we look back at all of our accounts and wonder how it got to be so overwhelming. The error however is not the number of accounts, but the lack of a cohesive plan to invest ALL of your investment assets toward the same goal(s). More often than not, we invest a 401K differently, and without any knowledge of, an IRA, which is invested differently, and without any knowledge of, a taxable account. We often consider each to have its own investment strategy with its own risk profile. We may take higher (or lower) risk in one account but that does not influence our risk strategy in our other accounts. The error is that we often fail to create an investment plan for the entirety of our wealth and instead piecemeal a strategy together by combining accounts with different risk profiles invested for different purposes.

At Eunoia Financial, we believe an investment plan begins with an overall strategy focused on accomplishing your goals. Only then, can individual investments be made to accomplish specific objectives and/or benefit from the advantages of the account type (taxable, tax-deferred, trust, etc.). We complete the circle by verifying that the combined risk and reward profile of individual accounts does not push the risk-reward profile of the original total higher or lower than expected.
 

Risk-Reward

 
It is this circular method which allows individual accounts to accomplish their particular goals AND a person’s total wealth to meet ALL of their goals.

Beyond this plan, Eunoia works with you to create a policy statement which meets your needs. This may include limits on particular security types, individual securities, cash balances and investment minimums to name just a few. The final statement allows for easy communication about the direction you would like to go, and the path Eunoia will take to get you there.

Additionally, we take actions specific to the type of accounts Eunoia manages on your behalf. For most people, taxable accounts should be invested differently than qualified or other account types.

Lastly, no matter the type of account, or balance, Eunoia’s goal is for you to accomplish your goals. The investments we make for you reflect our commitment to you.

 

Taxable Investing

As the name suggests, taxable investing is the process of investing assets whereby gains, losses and income will be taxed in the year received. The goal of investing taxable funds is to maximize the after-tax return earned by those funds. Tax-aware investing adds an additional layer of complexity and oversight to ensure any tax due is minimized as... Read More

Qualified Investing

Qualified investments are specific account types which are defined by the IRS. Largely, they exist in order to assist in the building of savings for retirement, and more recently, college. With a qualified plan, you receive an upfront tax deduction (or reduction) now, but will have to pay taxes on the entire amount in the future, or when you begin... Read More

401(k) and Other Company Plans

While 401(k)s are widely known and used, other types of company plans offer similar benefits. Most accept pre-tax income contributions and can be matched, or partially matched, by employers. Depending on the plan, there are limits to the employee contributions as well as the employer matching contributions. Companies may also limit their... Read More

Self-Employment Plans

If you own your own company, part of a company, or work for a small company, you may have an option to contribute to a self-employment plan. These are similar to company sponsored plans like a 401(k) but often allow higher contributions. Despite the constant need for investment, and re-investment in your business, Eunoia encourages those in this... Read More

IRAs

IRAs, and similar, are not sponsored by a company and do not earn any matching contributions. Accounts of this type were designated by the government to help those not working to also save for retirement. The stay-at-home mother, early retiree or student are oft-cited examples. Like employment, or self-employment plans, people whose situation allows for IRA... Read More

Pension Plans

The original retirement savings plan, pension plans are wholly funded by the company or organization. Today, pension plans are mostly offered to local, state or federal employees as companies have opted for different plans. Largely this is due to the wholly-funded nature of the plan. Most employers don’t want to contribute the necessary funds for their... Read More

Annuities

An annuity is an insurance product that pays out income and can be used as part of a retirement strategy. Annuities can be a popular choice for investors who want a steady source of income during retirement (or another period). With an annuity, you make an initial investment and in return it makes payments to you on a future date or series of dates. The... Read More

Private Equity and Venture Capital

Private equity and venture capital are non-liquid, or low-liquid, investments. Private equity focuses on buying, owning and running entire companies while venture capital is typically focused on partnerships with start-ups to help fund growth. Either way, funds are raised using a pooled investment vehicle specific to the particular... Read More

Contact Eunoia Financial to learn more about what we can accomplish together