Financial Advisor News

Piedmont, CA

Financial Advisor News

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Piedmont, CA

by: ALISON VAN DYKE

FIRST AND MAIN FINANCIAL

(510) 601-1935

Oakland, CA | Financial Planners East Bay Area Assist with Debt and 401(k)

Sometimes a client will need help with tackling debt liabilities. 

While debt can be overwhelming, it is important to get organized and figure out what debt needs to be paid, when it needs to be paid and how to pay it off.  Our clients, Jack and Janie, who are in their 40s, came to First & Main Financial looking for help on how to start eliminating their debt, but also in meeting their financial needs throughout retirement.  With young children and living in the expensive Bay Area, some people may think there is no way to get ahead of it all, but a financial plan can offer a road map to meeting your goals.

As we do with all of our clients, we went through a detailed data gathering process.  We then analyzed the information and produced a base case scenario, showing Jack and Janie’s current financial situation.  We assessed their types of debt, which ranged from high interest credit cards to student loans.  They also had IRS and state tax liabilities that needed to be addressed.  Using this information, we created a sample debt service plan and suggested what cash resources be used first.  In addition to reviewing their debt, we also helped them assess their budget.  While not always a fun task, it is important for couples to have a clear picture of income versus basic living expenses.

We also created multiple “What If” scenarios, such as what their financial future would look like with different projected salaries, different retirement ages, a home purchase (upgrading at different price points), increasing their retirement contributions, and different approaches to investing their current assets.  These “What if” scenarios helped assess the overall impact of changes to their financial plan and the options available to them.

Most importantly, we helped Jack and Janie organize their finances such that they put a plan in place to pay off their debt, get back on track to funding retirement, contribute to a college fund and lastly, purchasing house.  We also reviewed their current insurance, 401(k) investments and estate plan.  As with Jack and Janie, First & Main Financial provides clients with quality and individual attention as well as complimentary guidance on existing 401(K) money.  We also offer our clients a tiered fee schedule for asset management which is considered a good deal compared to the industry averages and starting rates usually charged by other firms.

If you are looking for some financial guidance, whether it’s for a one time financial plan or continuing advice on your investments, we invite you to meet with the First & Main Financial advisors for a free consultation. We would be more than happy to sit down with you, assess your current financial situation, and review with you our services to help you navigate your own financial future.

Oakland, CA | Best Financial Advisors Oakland CA; Plan with a Reverse Mortgages

Enhancing Retirement Income with a Reverse Mortgage:

Reverse mortgages are an important tool in the retirement income toolkit.

An existing client of ours recently decided it was time to retire.  He is 68 years old and he and his wife were concerned about unforeseen expenses during retirement and nervous about market volatility with markets currently close to all-time highs.  Another area of concern was the potential impact of significant long-term care expenses later in life.  They were looking for guidance in anticipating retirement expenses and wanted to have a better understanding how certain large, unexpected expenses could impact their overall financial plan.

During the data gathering phase of the financial planning process we thoroughly reviewed their annual living expenses and together decided that expenses should be increased to reflect what was actually being spent on a monthly basis.  After increasing their expenses and projecting their annual cash flows, the probability of success of not running out of money during their lifetime dropped from 96% to 75%.  This outcome reconfirmed concerns associated with their financial future.

After a lengthy discussion and review of the entire plan, we decided to look at options to be considered that would revert their probability of success back up to the 95% level.  We highlighted an overall expense number that would help their situation and discussed if a level of part-time work should be considered to offset additional expenses.  Based on the amount of equity in their home and limited retirement savings, we also considered a reverse mortgage.

Most of the reverse mortgages that are exist today are Home Equity Conversion Mortgages (HECM), which are regulated and insured by the federal government.  They have evolved over the years and when used responsibly, can create liquidity for an otherwise illiquid asset.  If used properly, they can support a more efficient retirement income strategy, resulting in more spending and/or a higher net worth at end-of-life.  After consulting multiple sources to gather accurate estimates of the value of the home, existing mortgage details, HECM costs, interest rate and principal limits, we were able to model a reverse mortgage and demonstrate how their annual lifetime cash flows would be affected as well as the overall impact to their net worth.

The result was a probability of success bumped back up to the 98% level when incorporating a reverse mortgage into their plan.  Their total portfolio assets (not including their home) were also increased from approximately $1 million to $1.8 million at end-of-life.  And, although no additional mortgage payments were made, their overall net worth remained unchanged at $3.6 million.

When sitting down with our clients, we were able to demonstrate how a reverse mortgage can be used effectively to enhance a retirement income strategy and create additional flexibility in a cost-effective manner.

If you have ever been curious if a reverse mortgage may make sense for your situation, we invite you meet with the First and Main Financial advisors for a free consultation.  We would be more than happy to sit down with you, assess your financial situation and review our services that will help you navigate your financial future.

Oakland, CA: Best Asset Management Firm for Women Advising Women on Finances

According to the Bureau of Labor Statistics, women represent 31 percent of U.S. Financial advisors.  Additionally, only 23 percent of CERTIFIED FINANCIAL PLANNER professionals are women according to the CFP Board’s white paper, “Making More Room for Women in the Financial Planning Profession.”  With not that many women advisors out there, it may seem difficult to find a woman advisor.  However, at First & Main Financial, we have a woman advisor who has worked with many of our women clients to help them understand and make decisions about their financial lives.  Most of our clients come to us based on referrals, especially those clients seeking to work with a woman advisor who will listen to their stories, understand their needs, and identify options for meeting goals.

One of our recent clients, Janie, came to us as a single parent with a young child, divorced and responsible for her elderly mother.  Her main focus was to make sure she was on the right path to fund her retirement, while at the same time funding her child’s college savings plan, and creating options to take care of her mom.  We went through a detailed data gathering process, uploading her data to our secure financial planning software. We then analyzed her information and produced a base case scenario; showing her current financial situation and outlook for years to come.  We also created multiple “What If” scenarios, such as different retirement ages, various investment strategies and different housing options for her mother and her family.

Within each of these scenarios, we projected a “probability of success” of reaching a life expectancy age with enough assets on which to live.  We demonstrated the positive or negative impact of these various scenarios to her total portfolio assets and net worth.  For example, by assessing her potential tax rates in future years, we were able to show the positive impact of converting her existing rollover IRA account to a Roth IRA, generating an additional $850,000 in net worth and portfolio assets.

In addition to reviewing her finances, we reviewed her insurance (Life, Disability, Auto, Renters/Home, Medical, etc.) to assess if she maintained enough coverage.  We recommended that she get a quote for an Umbrella Policy to give her greater liability coverage above her auto and home insurance policies, especially since her net worth was significant.

After presenting the financial plan to Janie, she asked First and Main Financial to manage her assets.  We offer a tiered fee schedule for our clients, which Janie appreciated. Like most of our clients, she considered this a good deal compared to the industry average and starting rates usually charged by other firms.  We also provide clients like Janie with quality and individual attention as well as complimentary guidance on existing 401(k) money.

If you are looking for some financial guidance, whether it’s for a one time financial plan or continuing advice on your investments, we invite you to meet with the First & Main Financial advisors for a free consultation.  We work with a variety of clients, especially women like Janie, who are looking for a relationship with a knowledgeable and trustworthy advisor.  We would be more than happy to sit down with you, assess your current financial situation, and review with you our services to help you navigate your own financial future.

Oakland, CA | Best Financial Advisor Bay Area; Planning with Restricted Stock

Like many of our clients, Mark works at a Bay Area start up company that compensates employees with stock options, restricted stock units (“RSUs”) and the opportunity to participate in the Employee Stock Purchase Plan (“ESPP”).  He and is wife Lee, who are in their 40s, came to First & Main Financial looking to verify they were on the right path to meeting their financial needs throughout retirement.  They asked us to help them figure out how much they needed to contribute to retirement funds, how to best fund a new house for their young family, and how to benefit most from their stock options, RSUs and the ESPP.

As we do with all of our clients, we went through a detailed data gathering process.  We then analyzed the information and produced a base case scenario, using their current financial situation.  We also created multiple “What If” scenarios, such as different retirement ages, various home purchases at different price points, and different approaches to investing their current assets.  These “What if” scenarios help assess the overall impact of any changes to their financial plan.

Within each of these scenarios, we projected a “probability of success” of reaching a life expectancy age with enough assets to live on.  Most importantly, we showed them the impact of exercising their stock options and RSUs over time, especially in regards to tax liabilities and capital gains treatment.  We explained the risks of selling or holding onto their shares.  We also suggested that they need to consider their overall goals when thinking about the potential sale of stock, not necessarily how to pay the least amount of tax.  Finally, we helped them understand the ESPP program and how to at least benefit from the discount provided to employees such that they could lock in a guaranteed profit.

First & Main Financial provides clients with quality and individual attention as well as complimentary guidance on existing 401(K) money.  We also offer our clients a tiered fee schedule for asset management which is considered a good deal compared to the industry averages and starting rates usually charged by other firms.

If you are looking for some financial guidance, whether it’s for a one time financial plan or continuing advice on your investments, we invite you to meet with the First & Main Financial advisors for a free consultation.  We work with a variety of clients, including clients like Mark and Lee, who wanted to understand stock options, RSUs and the ESPP.  We would be more than happy to sit down with you, assess your current financial situation, and review with you our services to help you navigate your own financial future.

Oakland, CA | Asset Management Expert for RSUs in the East Bay

Planning for the unknown can be challenging, but projecting lifetime cash flows through thorough analysis and well-developed assumptions can go a long way in clearing up an otherwise murky situation.

Recently, Jim and Sandy came to First and Main Financial seeking financial assistance. Their focus was to gain a better understanding and become more comfortable with what their future would hold once recently granted pre-IPO shares were vested.

Like many families, they were juggling two careers while raising two children, both in grade school.  Jim had recently started a new job with Uber (pre-IPO) and was awarded restricted share units (RSUs) upon being hired.  Sandy was busy with her career as well, owning and running her own salon.  They wanted to understand their current and future cash flow situation more clearly and re-evaluate their college savings and retirement goals; making certain they were on the right path for success.

We reviewed their current and projected living expenses as well as future income.  With the new job at Uber came an initial grant of RSUs as well as on-going grants annually.  Both types of grants would vest based on a pre-determined schedule once certain requirements were met.  The requirements were time-based (beginning one year after hire date) and performance-based (IPO), and both would need to occur for the initial shares to vest.  There would also be a six-month lockup period after the IPO, where no RSU’s could be sold.

We spent a significant amount of time combing through the plan summary documentation to gain an accurate representation of what was granted, when the shares would vest and over what period of time the vestings would occur.  We determined when the taxes would be withheld and when the shares could be sold and provided guidance on whether to sell or hold on to company shares.  We finally discussed and agreed on an estimated IPO date and price to use in our initial model.

Once the comprehensive financial plan was ready, we sat down with Jim and Sandy and walked them through the model.  We reviewed all the areas of the financial planning process and spent additional time on what-if scenarios associated with the RSU vestings.  The exercise was very helpful in setting expectations, but we knew we would revisit the plan once the IPO was scheduled.

The Uber IPO happened in May of this year and the post-IPO lockup period has recently ended.  We’d gotten back together with them prior to the lockup period to review the updated plan, which now contained the known IPO details and up-to-date vesting information.  The final result was a robust, easy to maintain plan that would specifically keep track of all RSU’s granted and sold by Uber and also support additional selling by our clients.

If you are looking for financial guidance, whether it be for a one-time financial plan or continuing advice on your investments, we invite you meet with a First and Main financial advisor for a free consultation.  We would be more than happy to sit down with you, assess your current financial situation and review with you our services to help you navigate your own financial future.

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.

235 Wildwood Avenue,
Piedmont, CA 94610, USA

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Piedmont, CA 94610, USA

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.