Aligning Meaning With Means II - Specifications

 

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)

1. 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

3. after #1 &#2 the prioritized goals, goal parameters (ground rules) and risk capacity (% or amount of downside willing to take)
   

4. 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

5. 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

6. 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