Aligning Meaning with Means: Means Specificiations
I.-
INside
Out Orientation vs Outside In Heuristic
· Aligning Meaning with Means vs Aligning Means with Meaning
· Enough vs More
· Fear: Outliving Money
· Adaptability & Resourcefulness on the Balance Sheet
II.- Give I - Retrofitting Each Prioritized Goal - Living, Contingent, &
Upon Passing (Graduating)
- Meeting cash requirements (gottas not oughtas or shoulds) fundamental present daily living needs rather than wants - for preferably a 18 month period (the average time of a bear market so one doesn’t get the yipes)
2 -After
#1 Aligning meaning with means rather than means with meaning in priority
- after
#1  the prioritized goals, goal parameters (ground rules) and risk
capacity (% or amount of downside willing to take)
- goal
specification (living)
- amount,
- duration
- assumed
1. after tax return, start finish),
2. risk capacity (% probability, % probability adjustment),
3. guard rail criteria - Jonathan Guyton
§ initial 5%
§ adjust annually for inflation
§ prosperity rule - when withdrawals are 4% of less of accumulation increase 10%
§ capital preservation rule - when withdrawals of accumulation are 6% take a 10% cut in withdrawal
4 attainment/adjustment: at levels + or -
(funded or unfunded
§ of liquid income producing,
§ liquid non income producing,
§ illiquid income producing, illiquid
-
((note
for income adequacy for spouse, income replacement upon disability -
contingency assets (((insurance))) are added).
-
CONSEQUENCE OF DOING NOTHING
- Investment
Policy -
· for asset accumulation goals i.e. education, financial independence ((via passive assets prior to retirement),
· retirement (through go go, slow go, and no go years) -
o again subject to an 18 month period of cash living expenses (the average time of a bear market so one doesn’t get the yipes)
o
Longevity
Assumption
i. Puttin’ It In vs Taking It Out
ii. Safety versus Returns relative to what is necessary for the goals
- goal specification contingent events
Income Replacement due to Disability
- Capital replacement due to capital impairment
- Income Adequacy for Heirs (spouse)
1. Longevity Assumption
- Asset Conservation upon Passing Graduation
i. Liquidity
ii. Asset Disposition According to Desires & Criteria
1. giving to who you want, when you want, how you want and based to your criteria (including provision for your companion animals)
2. If Then - earn out/merit - contingencies
iii. Legacy
1. To whom, for what only, earned on the basis of, with clawbacks for non performance
