I was recently meeting with a client and we were discussing their yearend tax planning strategy. They have come into some money and we were attempting to calculate their tax liability.
As we progressed in the discussion I was asking them about their asset allocation. Reminding them that these additional funds should be allocated appropriately and to make sure they had a decent reserve.
When they told me they had done nothing to allocate the funds I was reminded of my client who believed in having “tollbooths”. He believed that everyone should set themselves up with what he described as “tollbooths”. Places where at least small monies are going in on a regular basis.
With the belief that if you have enough “tollbooths” you will not have to worry about money, because some is always coming in.
With this in mind he had invested in some real estate syndicates. He was also looking into owning buildings directly, as well as small businesses that would be able to pay him “dividends. He liked the idea of coin operated laundries.
But the client I was working with this day had not made any moves. The funds were in a low paying savings account. So I explained my other client’s theory and they were intrigued.
The last time I had met with them I had given them referrals for financial advisors. They had the cards and were planning to contact them shortly.
My guesstimate is that there is a 50/50 chance they contact a financial advisor in between now and when I do their 2016 taxes.