For most people, the key financial planning question is, "How do I put my money to work?" In a perfect world, that answer has certain ideal characteristics, such as:
- High rate of return: A total return high enough to out perform inflation and taxes and still meet the investment goal.
- Complete safety: There would be no concern that any part of the investment could ever be lost.
- Always liquid: An investor would be able to redeem the investment and receive cash at any time of day or night, every day of the year without any penalty or loss of principal.
- No income taxes: There would never be any income taxes due on the investment’s yield or growth. The investor keeps everything earned.
- No skill or knowledge required: No special skill or knowledge would be required to manage the investment. One could just forget about the investment and enjoy life.
Such a "perfect" investment does not exist, of course. In the real world, individual investors must choose from a range of investment tools, each with different characteristics and uses. WPC uses a process of determining the best investment for a particular need or situation by asking the following questions:
- Why are you investing? Do you need income for current expenses or are you accumulating money for a future need?
- When will the money be needed? At any moment? A year from now? At retirement? 25 years from now?
- How much risk are you willing to undertake? Can you afford to lose all or a part of the investment and not have the loss affect how you live?
- Are income taxes a concern? If the investment is currently taxable, to what extent will the additional tax reduce investment growth or push you into a higher tax bracket?
- What is the economic outlook? Investment opportunities will vary depending on whether the economy is growing or shrinking.
- Do you have the skill and knowledge to manage your investments? Is professional investment management needed?
- How much money is there available to invest? Are smaller amount available periodically, or is there currently a larger lump sum of money?
WPC’s objective is to design a comprehensive financial plan based on our client’s individual needs and desires. This requires not only a detailed understanding of the client’s objectives, but the finest financial resources and products to fit those needs.