Financial Literacy

Literacy to legacy building wealth for the next century

In a rare interview, David Rockefeller Jr., chairman of Rockefeller & Co., recently told CNBC that family meetings, allegiance to their family history, and family values have helped the iconic Rockefeller clan manage their wealth across seven generations.

But the Rockefellers are a rare breed, and as is often suggested in financial circles, family wealth is often made and lost in three generations.

Creating sustainable wealth through the power of thoughtful financial management has been the focus of Eric D. Bailey, Certified Financial Planner® Practitioner. As the founder and CEO of Bailey Wealth Advisors (BWA) based in Silver Spring, Maryland, he finds that those new to wealth don’t have a long-term game plan.

bailey500xMost of Bailey’s clients are first or second generation affluent, and generally have little idea on how to perpetuate wealth. For them, and for the community at large, Bailey has created the Literacy to Legacy program, a philosophy developed over his 34 years in the financial industry.

The program focuses on creating sustainable wealth in families and communities. The topics covered in seminars and workshops include wealth conservation, asset protection, income tax reduction strategies, business succession plans, retirement income, and perhaps most importantly, a family’s sense of financial security.

The initiative was born with the notion of improving financial literacy for the next generation. Bailey says, “We have our clients engage in conversations with their children regarding a 50-year game plan for the family.”

The average consumer spends just 1.5 hours a month on finances, and that’s mainly paying bills. Bailey believes financial literacy programs are needed in middle school and high school, so by time young people get to college they know the economic fundamentals and are minimally capable of making good decisions.

For clients, the education process involves the financial advisor first asking clients what is most important to them. How do they see themselves and family 20 to 50 years from now? “Once the specifics are articulated, clients realize they actually have more decisions to make than they imagined. In many cases, they were never asked these questions.”

bailey400xBailey explains, “Most clients are well-educated and capable of making good decisions, but they need more than just data. They need knowledge. When we help them evaluate strategies that show potential opportunities, as well as the downside of any action or inaction, they can make better decisions that impact their families for 50 to 100 years.”

As people live longer, they become concerned about outliving their money. BWA utilizes a unique approach that builds a three-tranche portfolio, divided into thirds based on the client’s projected life expectancy.

The first tranche is designed for stability and income while the second and third tranche is invested for growth and designed to outpace inflation. This shows clients a clear picture of how each tranche will help provide income and security for the different phases of their lives. It makes tangible the ability to not outlive their money.

As for long-term care, BWA helps clients with hybrid and traditional long-term care insurance options. The hybrid is a non-traditional life insurance acceleration product with little inflation protection, but if it isn’t used, their beneficiaries receive the money. BWA helps the client determine which program is best for their needs.

For retirement planning, BWA’s secret sauce is understanding what the client really wants. They pointedly evaluate current expenses verses what a client will need to spend monthly to sustain their desired lifestyle in retirement. They believe only then can clients determine if their projected accumulation of wealth will be sufficient for the next 25 to 30 years.

Baily says, “Once that is determined, the portfolios are customized with a number of variables – inflation, taxes and health costs – that are not always on the client’s radar. The portfolio is then structured with the goal of minimal volatility and risk, clients can pursue their retirement goals.”

As for what people should look for in a financial planner, Bailey says they should find out if the advisor is a fiduciary, officially recognized as a CERTIFIED FINANCIAL PLANNER™, Chartered Financial Analyst®, or Chartered Financial Consultant® designee. Earning these designations show a continued commitment to the higher standards for financial education, expertise and business practices that always put the client’s best interest first.

For more information, visit Bailey Wealth Advisors.

Eric Bailey is a registered representative of Lincoln Financial Advisors. Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Branch Office: 8403 Colesville Road, Suite 845, Silver Spring, MD 20910. Insurance offered through Lincoln affiliates and other fine companies. Bailey Wealth Advisors is not an affiliate of Lincoln Financial Advisors. CRN-2222327-082418


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