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Disorganized Working Professional Starts Building Wealth after Getting Financial House in Order

By Jeffrey Meenes, CFP® (Published Date April 21, 2022)

Busy, Unorganized, DIY-investing Working Professional Earns Promotion & Starts Building Wealth after Getting Financial House in Order

No matter what your background, where you come from, or the salary you earn each year, I think we can all agree that the today's working world is extremely hurried and stressful. You must remain laser-focused on your goals to perform well and stand out. With so much on your plate at work, it’s doubtful you have time to:

  • Re-balance your portfolio when the market swings
  • Evaluate and implement your risk tolerance level
  • Manage cash flow efficiently
  • Research the right low-cost investments
  • Calculate when you’ll have enough money to retire
  • Optimize your tax strategy for minimum liability
  • Decide when to exercise your stock options
  • Allocate your assets to hedge market risk

If you are DIY-ing your finances and have even half of these covered, you’re likely doing better than most. But as you well know, a half-concerted effort does not constitute success. If all your bases aren’t covered, you leave yourself susceptible to damaging financial missteps.

Working professionals without an advisor in their corner to guide their plan and monitor its execution often fall behind in more ways than one. But, don’t just take my word for it. Let’s look at this next case to see exactly how this plays out.

The Client Profile:

  • Low six-figure working professional with about $750,000 in investable assets
  • Single, busy, disorganized, hyper-focused on hitting his bonus targets
  • Not focused on money (other than earning it)
  • Assets all over the place
  • No long-term tax planning strategy in place
  • No real retirement plan
  • Has a will and a life insurance policy, but nothing else

The Problems:

There were some real big-picture problems here that are common amongst many clients before they start working with me.

1. Overconcentration of Risk

The corporate world is a risky one—little  loyalty exists and many individuals are compensated with a combination of assets from bonuses based on performance to stock options and restricted units. A number of factors, including underperformance, could put their cash flow and job at risk.

Both the volatile nature of his work and compensation structure put this client in an overconcentrated position—both professionally and within his portfolio—and he didn’t even realize it.

We had to balance the risks involved in his investment strategy against his already risky career to maximize reward and hedge against financial disaster. We reduced portfolio risk by owning less equities and remaining diversified. We also built a strategic plan on how he would exercise his company holdings to limit his tax liability.

2. Below Average Returns due to Emotion-Driven Decision-Making

As a single, successful working professional, this client didn’t feel he had much to lose. He could win at work, so why couldn’t he also win in the market? But the problem with DIY investing is that rash decisions tend to be made that injure long-term growth and position individuals to earn below average returns.

According to Dalbar, Inc., a Massachusetts-based research firm that has been studying the behavior of mutual fund investors and market returns for 25 years, the average equity fund investor earns far less than the index average. Compared with the S&P 500, through December 31, 2018, stock mutual fund investors underperformed by 5.88%, annualized, over 30 years, 3.46 percentage points, annualized, over 10 years, and 4.35 percentage points, annualized, over five years. Over the course of thirty plus years, the average investor has continued to underperform over and over again.

It's best to seek the help a financial professional who can act as an intermediary between you and your emotions. Your advisor will help to assuage your fears when triggers arise, explain to you what is happening in the market, and keep you on track to reach your long-term financial goals. 

3. Inefficient Tax Strategy

This client had no idea how his assets were invested, how or when his compensation could create a catastrophic tax event, or how his income would be taxed in retirement. He was missing an integral part of the wealth-building puzzle—a tax-sensitive investment strategy.

Sure, he was working with a CPA, but the CPA simply prepared his taxes, he didn’t build a strategic tax plan for this client’s future cashflow. Good CPAs might give tax advice, but they are not registered investment advisors and rarely will help you make the most tax-efficient investment decisions from the start.

Of course, it’s not impossible to build long-term wealth without a strategic tax plan in place, but it is much more difficult. Taxes can substantially impact the amount of wealth you build and how fast you build it. The best scenario is to have a Certified Financial Planner® (CFP) Professional and a CPA who work strategically as a team to protect your best interests.

4. Insurance and Estate Planning Gaps

When asked about his current insurance policies, this client had no idea what amounts he should own, what he was paying for, or what each policy covered.  On the estate planning side, he had drafted a will, but had not designated a power of attorney, drafted a health directive, a living will, or any other estate planning documents.  

Insurance policies, trusts, and estate plans should be reviewed and updated every couple years. But, for the busy professional, these tasks get postponed and postponed until they are eventually just off the radar completely. The problem with letting these matters fall by the wayside is that no one can predict the future. If your ability to earn an income could be jeopardized any day, and without the right safety nets in place, you stand to lose significantly.

Your advisor should always play an integral role in helping you review your current policies and make adjustments where needed.

Meenes Wealth Solutions:

Above all else, the goal was to get this client and his portfolio organized. In essence, we were starting from scratch. We had to build and put together each of the above puzzle pieces from the ground up. This included locating all of his assets, reviewing his investment tax strategy, reviewing insurance policies, and connecting with an estate planning attorney to complete his estate plans.

Besides getting this client’s entire financial house in order, one big money-saving move we made was with his target-date index fund investments. We had to re-evaluate whether or not he should stay invested in target date funds due to the (1) inappropriate investment mix within the fund and (2) higher expenses of holding them.

Target date funds are a popular choice among many investors as they re-balance themselves over time as risk changes and hope to generate a certain return by the target date. The average fund has an expense ratio of 0.51%, but many are significantly higher; what this means is that investors in the market over 20 to 40 years can expect to pay hundreds of thousands of dollars, and likely even millions in fees by retirement! Just for comparison, note that index equity funds, which track the performance of the market, can come in at less than 0.10% in fees. So, while this fix-it-and-forget solution sounded good to my DIY client, it wasn’t doing as much as it could in terms of helping him build wealth.


  • Client is saving over $10,000 annually in management fees and expenses by re-allocating his portfolio to lower-cost investments that could produce a higher return
  • He now has a pulse on his cash flow, savings rate, and risk tolerance level
  • Insurance policies are in place to protect against the unknown
  • Estate plans have been drafted and finalized by both Meenes Wealth and the coordinating estate planning attorney
  • This client’s confidence in his financial plan has translated into his everyday life resulting in higher performance at work and a subsequent promotion to a Director Role leading to earning a higher income
  • Has a financial plan that keeps the client at a 99% probability of success in achieving all of his defined goals while still maximizing the amount the client can spend beyond planned items
  • Living life on his own terms years sooner and with a higher probability of success