Global View Investment Blog

Common Questions Asked by Our Richest Clients

Think the wealthiest people have all the answers about money? That’s not necessarily the case. Certain questions are asked again and again, by nearly everyone, the richest included. The best financial advisors in Charleston, SC, whether they’re expensive or not, are sought out by people who can afford them. Why? Because rich people have questions too! At Global View, we have many very successful clients, and here are some the most common questions we get from them:


Do I have enough money? Will I outlive my money?

Whether you’re rich, just keeping your head above water or somewhere in between, this question is probably the most common one we get.

Only an individual can answer the question of whether there’s “enough” money – and even what “enough” means for them. However, the best financial plan should cover you for emergencies (three to nine months’ worth of living expenses) and retirement. After that, it’s a smart idea to make a list of your priorities. (Second home? College for children? Frequent vacations?) And use your money to achieve or grow these priorities.

Concern about outliving money in retirement is very widespread – 49 percent of Americans fear it. One rule of thumb is to withdraw your money in retirement according to the “4 percent rule.” Your retirement savings, withdrawn at 4 percent annually, can last for roughly 30 years. If you retire at 66, the money can last until you’re 96.

If you’re still worried about a shortfall, you may want to invest in a Roth Individual Retirement Account (IRA). Unlike traditional IRAs, Roth IRAs don’t need to be withdrawn when you reach a certain age. You can hold them for as long as you like.


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Will the political climate have an effect on my money?

Politics can have a negative effect on your money. Wars, conflicts and trade tensions, for example, can affect the economic outlook of countries and the companies that do business with them. National policies like taxation can affect your tax position. But it’s important to note that, for every potential negative effect, there may be positive effects as well, when conflicts and tensions are resolved or policies exert a positive effect.

In the larger picture, changes in your money driven by the political environment is part of the larger issue of managing risk in the financial markets. A financial plan should account for all types of risk, so that you are positioned to benefit from potential reward and protected against undue risk. Your personal tolerance for risk is also an important consideration.

Risk and reward are often handled via asset allocation. Stocks are high reward but relatively high risk; bonds carry lesser reward but also lesser risk. One commonly used method of managing risk and reward in a portfolio is to peg your risk exposure to your age. Why? Because if you’re 35, your portfolio may have multiple decades to recover from any sort of risk exposure. If you’re 65, on the other hand, you could be negatively impacted with less time to recover.

The rule of 110 specifies that people should subtract their age from 110 and place the resulting figure in stocks. The remainder goes in bonds, which are low risk. In other words, if you’re 35, 75 percent of your portfolio would be placed in stocks, and 25 percent in bonds. If you’re 65, just 45 percent would be placed in stocks, and 55 percent in bonds.

It’s a good idea to discuss your portfolio’s risk-reward profile with a financial advisor. Make sure the advisor is an independent, fee-only, fiduciary financial advisor who is legally obligated to work in your best interest for the best outcome.


How can I teach my kids about money?

There are several different aspects to teaching children about money, and parents need to make decisions based on their own values and beliefs. Some parents give their children a specific allowance or require older children to have a summer job. The children cover their own needs and wants out of their allowance or paychecks. Others have conversations about wealth in their community or the responsibilities of running a business.

Some parents like to teach their children about stock market investing. There are games and apps that can set up a virtual portfolio and allow children to experience stock market fluctuations and track specific stocks virtually, before committing actual money. Many parents then move to a portfolio with real money. Global View can help you with this.

If your children are going to inherit a significant degree of wealth, many of the best financial advisors in Charleston, SC suggest having a conversation with the children about it when they are old enough to understand.


What happens to my money after I die?

When we get this question, we tell clients: Don’t wonder what will happen to your money after you die. Plan for it! Draw up a will and make sure it is signed. A will explains where you want your assets to go after you pass away. You should specify who (or what, in the case of organizations) will inherit your assets, and when and how your assets will be disbursed. A will is part of an estate plan. If you have serious money or not, we recommend making a will as soon as possible. Global View’s in-house estate attorney can help you with this.

If you do pass away without a will, there is no legal way to ensure that your wishes are followed. The state will step in to name an executor. State laws vary, but many states favor spouses, registered domestic partners and blood relatives as inheritors; if you want friends, unmarried partners or charities to inherit your assets, the chances are slim unless you have a will.

It’s a good idea to revise your will periodically, to reflect significant changes in your assets and your life. If you buy a new house, for example, or have a new child, both need to be covered in an existing will.


How do I lower my taxes?

There are many ways to lower your taxes. It benefits many people to take advantage of any major itemized deductions, such as mortgage interest and deductible healthcare expenses, including any contributions to a Flexible Spending Account (FSA) or Health Spending Account (HSA).

Contributions to traditional IRAs will lower the amount on which you pay tax. The maximum contribution for 2019 is $6,000 ($7,000 if you are 50 years old or older). Contributions to a 401(k) are taken pre-tax, so serve to lower your tax burden. There is a complicated set of rules if you or a spouse is contributing to both an IRA and 401(k), so be sure to check with a financial advisor before making any major decisions. Global View’s in-house account can help with this.

Your options for lowering taxes can be complicated. Consulting with one of the best financial advisors in Charleston, SC who offers family-style office services in one place can help you optimize your tax burden – a prudent idea!


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Christie Simister

Written by Christie Simister

As Client Service Manager, Christie oversees the administrative issues that directly affect our clients’ goal attainment. She graduated from the University of South Carolina Upstate with a BA in Interdisciplinary Studies. Christie worked for W.W. Grainger for seven years and has a strong customer service background.

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