Financial Planning

Financial planner and wealth advisor Stephen Grochol of SGC Financial Services presented at the Executive Forum Silicon Valley in 2021 about all major six areas of financial planning: Current financial position, retirement planning, insurance protection planning, investment planning, estate planning and tax planning. 

To put all pieces together AND to accomplish one’s retirement goals, these steps need to be taken:

  1. Identifying goals
  2. Gathering data
  3. Analysis and planning
  4. Develop solutions
  5. Implement strategies
  6. Review (quarterly)

Current financial situation

“You don’t know where you are going if you don’t know where you are…” said Mr. Grochol.  Whether an individual or a couple, the first place to start is a current year’s balance sheet that breaks down assets and liabilities, as well as percentage for asset types such as cash, taxable investments, qualified retirement, life insurance and real estate. This first step is to:

  • Determine current income and expenses
  • Determine current and projected net worth
  • Establish an emergency fund

Retirement planning

To prepare for retirement, you need to 

  • Estimate retirement income and expenses
  • Determine retirement savings needs
  • Determine how to distribute your retirement funds

To determine if an individual or a couple have enough funds for retirement, projections will be made for possible retirement preferences such as 

  • When you can retire: early, late, or on time
  • Spending levels during retirement
  • Risk analysis for various market conditions
  • Remaining assets for your estate

Insurance planning

The purpose of insurance planning is for

  • Providing for your family in the event of death
  • Protecting your income in the event of disability

For most of the aging retirees, long term care costs can be significant without adequate long term care insurance. In the event of disability, not only will there be substantial draining of wealth, but there is also the opportunity cost as the lost investment growth on the money used for paying for care from income or from existing investments. It is important to do the following planning long before retirement:

  • Longer term care insurance planning
  • Life insurance effect on protection planning and estate transfer
  • Long term disability
  • Health insurance
  • Liability insurance

Investment planning

One important way of wealth accumulation is through investment, which requires one to 

  • Assess your risk tolerance
  • Design an asset allocation strategy
  • Evaluate investment strategies
  • Fund college education or a home purchase

Asset allocation depends on each person’s risk tolerance. Mr. Grochol presented this question for members of the Executive Forum to determine their own risk tolerance:

Which of the following statements would best describe your reaction if the value of your portfolio were to suddenly decline by 15%?

  1. I would be very concerned because I can’t accept fluctuations in the value of my portfolio.
  2. If the amount of income I receive was unaffected, it wouldn’t bother me. 
  3. Although I invest for long-term growth, even a temporary decline would concern me.
  4. Although I invest for long-term growth, I would accept temporary fluctuations due to market influences.

Estate Planning

The purpose of estate planning is to:

  • Transfer your estate according to your wishes
  • Minimize estate taxes and expenses
  • Fund estate taxes

To avoid costly and prolonged probate, these documents need to be prepared in advance of one’s death:

  • Trust
  • Last Will and Testament
  • Power of Attorney
  • Health Care Directive
  • Charitable Remainder Trust

Tax planning

  • Project federal income taxes
  • Evaluate tax-minimizing strategies
  • Investigate tax-favored investments

With every financial decision and recommendation in a financial plan, tax planning needs to be strongly considered in all areas and at every phase.

Please email Stephen Grochol at stephen.grochol@sgc-financial.co, or call: (650) 227-0380

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact Glenn Perkins gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.

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Financial EQ Can Improve Your Relationship with Money

Executive Forum Silicon Valley invited Emily Scott, a thought partner working with her clients to help unpack their money stories to improve their personal and professional financial decision-making, communications, and relationships. With no assets under management, Emily’s sole skin in the game is her clients’ peace of mind and clarity in discovering their money mindset, exploring their legacy, and determining their philanthropy.   Emily works with financial advisors, and other professionals to help their clients understand the role of money in all aspects of their lives.

Identifying one’s own feelings about money

Ms. Scott started with a self assessment on a scale from 1- 10, to see the intensity of one’s feeling about one’s money, more or less categorized into four types of emotions:

  1. Grateful, secure, tranquil, enough, amazed, thankful
  2. Anxious, concerned, nervous, uncertain, uneasy, stressed, worried
  3. Vulnerable, fragile, miserly
  4. Scared, frightened, paralyzed, terrified, f*cked

When it comes to decision making the personal side of money is more important than the technical side

There are two sides to money, the technical and personal sides. Both sides are equally important and complex, but it is the personal side that drives decision-making, said Emily.

The technical side includes aspects such as taxed, investments, estate planning, cash flow, risk management.

The personal side encompasses relationships, emotions, hopes and dreams, self-esteem, sense of well-being.

Financial EQ affects decisions, communications & relationships

Aristotle said: “Knowing yourself is the beginning of all wisdom.” 

Everyone’s relationship with money starts with one’s core beliefs about money.  Our money story starts early in our lives by the implicit and explicit messages we receive on a daily basis. This story comes from our homes, our cultures, gender, media, and more. For most, we are taught to not talk about money and any feelings we have are deeply embedded and manifest in ways we don’t even realize.

The source of all money-related thoughts and behaviors derives from one’s core beliefs.

Thoughts and behaviors around money lead to outcomes and consequences.

Better outcomes with money depend on changing one’s beliefs, thoughts, behaviors

If you are not happy with your money situation, you need to start to adopt NEW beliefs, as shown in the below example of a  “personal wealth mission statement”: 

  • “I want my money to represent who I want to be as a human being, with my knowledge and emotions aligned to maintain my security, flexibility, freedom, and generosity.

Several things need to happen in order to achieve better outcomes:

  1. Recognize beliefs, thoughts, and behaviors that are detrimental to your new goals;
  2. Rethink and reframe new beliefs and thoughts that are intended for better outcomes; Revisit these beliefs, to get clarity and confidence;
  3. Align intentionality with developing new habits and routines for reaching your new goals;
  4. Getting your subconscious (your “computer”) to work for you, until your goals are accomplished.

To get a personal consultation about changing your relationship with money, please contact Emily Scott’s email: emily@emilyscottand.com or call her at: (415) 609-1900. 

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact Glenn Perkins: gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.

A Roadmap for Pivoting a Business Towards Future Growth

In times of turmoil, we hear the inevitable cry to pivot your business into a new set of products or services. Exactly how is that done? What are the steps? 

 Do we need a crisis to pivot our business?

Shouldn’t we always be looking to pivot our business?

And, if pivoting is so easy, why doesn’t everyone do it? 

These questions were explored at the Executive Forums Silicon Valley Top Executive Forum this month through a presentation and discussion led by Beatrice Stonebanks (Stonebanks Sales Management Teams). 

The discussion explored both the impact of the current COVID 19 environment as well as general long-term industry and buyer trends. After all, no one wanted to be like BlockBuster Video who missed the trend and technology of HOW consumers wanted to procure and engage, even though they knew all along about consumer demand for video content. Same goes with many taxi companies who did not innovate and pivot towards new ways of meeting customers’ needs for transportation and missed the trend and technology of HOW consumers wanted to procure and engage.

Ms. Stonebanks walked the members through some specifics on how to use industry reports to answer the following types of questions, as a roadmap to focus on:

  • What are the trends in your market? 
  • Exactly why are your best customers buying from you? 
  • What technology will be used to buy your products and services?
  • Where are the growth sectors that value similar characteristics?
  • What happens in your target markets if a Black Swan event happens?
  • How must you embrace technology to stay relevant to your customers?

This is a concise and straightforward method using just a few key questions to determine why your best customers value your product, service or company and what additional value you can provide.

The members were led through the “Stonebanks Sales Management 10 Step Process” that acts as a roadmap to help companies work through this process. A summary of the ten steps of this process are:

  1. Access 2020 Tech Trends Report 
  2. Research Your Sector (or the sector you might pivot into)
  3. Keyword Search a Term or a Specific Niche
  4. Conduct an Ideal Client Summary
  5. Create a Decision Matrix for Your Company
  6. Choose your Preferred Target Niche(s) 
  7. Review the Top Ten Fastest Growing Sectors – Match with Your Niche
  8. Analyze Optimistic and Pessimistic Trends in Selected Sectors
  9. Adjust Your Products or Services Accordingly
  10. Create Your Business Development Game Plan

Each specific member company was presented with a quick summary of the results of this process. For example, for one member who runs a full-service printing company, the following trends were identified. Although these types of trends are just the tip of the iceberg, consider how valuable this type of data-derived information can be in developing business growth plans. These trends were  identified for the printing company:

  • print on packaging is a growth area – flexography, gravure
  • professional services to other printers 
  • geographic collaboration (FTD model) are applicable
  • sector growing by 12% through 2024

This short article cannot do justice to the richness of the discussion around this process, and how it is relevant at all times, beyond COVID 19.

So pivoting is not that easy, however, there is a process that can be used. If you are looking to skate your company to where the puck will be (or how to use the puck in a completely new game), I recommend that you contact Beatrice Stonebanks (510 338-0896 www.stonebanks.net). 

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS) or The Seven Stages of Growth, contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.