The Financial Blueprint

By: Michael DeVizio, Partner

Picture this; you are given the opportunity to have a top-tier architect work with you to help you build the home of your dreams from the ground up. Where do you start? Do you start picking out the marble tile for the kitchen floors? Choosing the colors of the paint in the upstairs bedrooms? Deciding what furniture to put in the master? Sounds fun.

Of course we know the reality is that we are a long way from those “fun” decisions for this dream home. Where we must ultimately start (and why the architect is so important), is the blueprints of the home. Once our architect has all of the measurements of the home confirmed, what is likely the most crucial part of the blueprint? Naturally, it’s the part of the home that gives us the security of structural integrity for decades to come. This is the part of the home that ensures it will survive through years of rough snow storms, hurricanes, windy nights, severe humidity and natural deterioration. DING DING, you got it right, THE FOUNDATION. Without a properly designed strong foundation, all of the “fun” things we will eventually have in the home in the future, are in jeopardy. 

If all of the above makes complete sense, then let’s use that same analogy for our financial home. What are the things that people love to talk about when it comes to finances? Maybe it’s retiring young at the age of 50? Or hitting that huge return in that stock you read about on a random twitter account at 2:00am? Or maybe it’s owning rental properties throughout the country? These are all desires that sound great and all of them are actually very doable. But how can we ensure that all of this can happen and be sustainable for years to come? 

The answer is making sure we have an impenetrable foundation that will give us the ability to do so! What the foundation entails are all of the strategies and products we need in our financial lives to protect against the “what-ifs” in life. Our lives do not follow perfect linear lines upwards. We have dozens of things we must unfortunately worry about. What are some of those worries?

1)  What if during our successful working years, we become sick or hurt and are unable to have the same significant income continue to come in to the household?

2)  What if 3 months after we get that huge promotion we’ve been working towards, a global pandemic halts the job market completely, and inevitably forces the company to lay us off?

3)  What if, even though we take such good care of our health, an unknown heart issue causes us to pass away prematurely?

4)  What if another person who has no automobile insurance, while texting-and-driving, hits you causing significant damage?

These are all events that can be protected against by having the proper planning in place in our financial foundation. If we go box-by-box (as you see in the image below) we can attack each “what-if” with the right types of insurances, strategies and documents. Once we have the foundation structurally sound, we are given peace of mind that all of the “fun” desires we have for our finances in life won’t come to a screeching halt when the storms of life do hit us. If any of the four listed-above scenarios do occur (or any of the dozens of other scenarios I didn’t mention), the house won’t come crumbling down over night. In fact, it will weather the storm with maybe only some minor cleanup, rather than re-building from the ground up.