In Good Time: The Fruits of Your Labor

Growing up with a family winery, I naturally adopted an appreciation for wine and wine making that evolved into being both a critic and a connoisseur. Our family’s wine is made like the families of centuries ago in Europe, grown in virgin soil never before used for agriculture. Pure natural winemaking from clearing the land, planting the vines, reaping the harvest, fermenting, and aging with precision, and then bottling onsite. All within our control, every aspect, to assure the best quality and taste for discerning palates. 

Now as a financial advisor, I have noticed many similarities between the meticulous attention to details and process of winemaking with the process of financial and wealth planning. Our approach to financial planning and blog is entitled Pure Perspective to pay tribute to a pure process. In this second installment of our blog, I will share how the process of winemaking over generations is similar to how it is best to approach financial planning.

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In the Beginning – Values & Root Stock

​Many people believe that wine begins with seeds planted into the earth. The reality is that it starts with root stock. Good root stock is realized from years of tasting, research, production and learning along the way. The same holds true for a financial plan. Your financial plan should be rooted in your values. What is important to you. What impassions you. What drives you. What brings you contentment. What makes you feel like you are living true to what you and your family stand for and live for. 

We as financial advisors are not here to plant seeds. We are here to guide you towards your goals rooted in your values. When your financial plan is based on what is important to you, it brings a deeper level of foundation from which you can build and grow. It is also more meaningful; hence you are more likely to follow your plan, do what is necessary, and be committed to the process. 

In the beginning, just like in winemaking, you must be patient, nurturing your plan just like a vintner nurtures the crop. 

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Case Brief: Start to Move Forward

Clients in their late 20’s and 30’s are well on their way to creating the reserve funds, investing small amounts systematically, and putting the protection in place that will secure it all should something happen.  They see progress and with an understanding of their plan goals, they don’t panic when expectations vary momentarily from what was envisioned.  Starting, saving, investing, and protecting is the foundation we encourage at the beginning.  If you are starting much later in life, it doesn’t mean you have lost your chance to grow something for retirement, you just have less time and need to approach it intentionally. Many of our clients who are getting started with us know that it is a process that develops over time.  The amounts saved or invested are not as important as getting started.  In the beginning or starting off the important thing to remember is that discipline to a plan is important.  The accomplishment doesn’t come until later.  Like making wine you must first start with a solid set of goals and create the foundation that one day produces the wine. 

Accumulating – Healthy Harvest

A vineyard’s healthy harvest does not just happen overnight. There are many volatilities that can wreak havoc on the desired crop -- bees, wasps, birds, drought, flooding, to name a few. The same holds true with financial planning. One only needs to follow the stock market to know this to be true. However, the stock market isn’t the most volatile aspect to a financial plan. Life is. Unexpected life events and transitions, from blessed occurrences to unexpected turmoil can all have an impact on your desired financial end game. 

The key to accumulating wealth in your financial planning is through diversity and versatility in your holdings. Just as a healthy vineyard has varietals of grapes and wine, so must a healthy financial plan have multiple buckets of earnings and assets. Too many people put all their eggs into one basket … a 401(k), an expected business valuation, a real estate holding, to name a few. By doing this they are creating risk and limitations they didn’t realize they were creating. 

Just as a vintner watches over every stage of the crop as it grows and matures, so must a financial advisor in unison with you. 

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Case Brief: Building Lifestyle Capital

A couple in their early 50’s started their journey with small goals, small contributions, and a lot of hope and faith for their future.  Their trust in the process created a sizable retirement plan that continues to grow, multiple accounts with varied tax benefits and accessibility, a college funding program that will provide for the first three years of college tuition, and they are nearing the completion of funding their protection part of the plan.  They didn’t allow short-term asset performance sway them from their overall plan. They see a clear path ahead.  Knowing that there is little to no stress about a comfortable retirement and getting the kids through college without loans is important.  Being able to enjoy these years and college parents’ weekends is pure happiness for them. Discipline was key to their ability to accumulate their lifestyle capital, by not losing sight of their goals.

Supplementing – Pairing & Paring

Pairing wine with the right foods is similar to pairing your financial needs with your lifestyle goals. If either are out of sync, it leaves a bad taste in your mouth. Staying true to what is important to you, and not leaping into options just because someone else you know is doing it, is what being a steward of your financial future is all about. We can be your sounding board and voice of reason when those bright shiny objects of financial opportunity are enticing you off your path, to help you determine what makes sense for you and your family. 

In the supplemental years, after retirement, there may also be a paring of what is no longer necessary, similar to trimming away the excess growth of a vine to ensure a more robust cluster of grapes. It could be expenses that you eliminate, or it could be downsizing your residence. Whatever you may simplify leaves room for other areas of your life to prosper. 

You can continue to grow your assets while in retirement and not just deplete them. This is where a financial advisor can keep you informed on your options.

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​Case Brief: Total Peace of Mind

A husband and wife in their 60s owned a couple of rental properties, had good W2 income, and saved and invested along the way, while contributing the max to their retirement plans. They diligently managed debt loads and because they had a plan, it never felt like they were making a sacrifice sticking to the plan.  They planned while staying educated about social security, passive income like rents, and then supplementing with alternative assets like insurance for additional financial back stop. They also considered how to be protected against unexpected long-term care costs by start early in the beginning or accumulating phases with products that evolve and changed with their needs during each phase.  Testing, gauging, tasting, projecting help us know if they will have the right amount.  Determining which bucket to take from helps them extend the assets they have already accumulated.

The most important aspect of wine making and financial planning is that, in both cases, it takes a team to research, monitor, cultivate, manage, nurture, allocate, preserve, and distribute. I raise my glass to the privilege of serving the many generations of clients we have guided. 

May your harvest be truly representative of the fruits of your labor. Cheers!

Empowering generations, 

Matt

Matthew Hudack, CLU, ChFC

P.S. To learn more about our family winery, go to www.majorcavineyards.com.