Investments
The Inefficiency
Many people look at investment returns in absolute terms. A “good return” is seen by an investor as a
positive return, and so when the markets are up and yielding higher than a checking or savings account,
most investors are generally content. A more complete analysis, however, is to look at
relative returns. In other words,
did the investment return exceed that of an equivalent index product with similar risk and reward
characteristics? In our experience, most investors do not perform such an analysis, and therefore
have little understanding how “well” their decisions (or those of their advisors) played out.
Furthermore, many investors will not consider the drag created by fees and taxes on their investments.
They do not take the time to calculate what at the end of the day is the most important metric: which is
what the individual keeps once the government and members of the financial services industry (team) take
their share.
Efficient Investors achieve the highest after-fee, after-tax returns possible for a specific level of risk and relative to other comparable alternatives.
Our View
Risk adjusted net return - after fees and after taxes- is the most important metric of investment success.
Discretionary Investment Management
Clients engage us to handle all aspects of their investment portfolio – asset allocation, security selection, execution, performance monitoring, and rebalancing. Clients give MYeCFO full authority to execute a particular investment plan according to their stated guidelines and constraints, which we can help define. We use a third-party custodian such as Charles Schwab or other financial institution that the client designates. MYeCFO does not hold client assets directly.
Our Work
The MYeCFO team designs, builds, and implements investment portfolios that focus on minimizing total fees and taxes while achieving the highest possible return per unit of risk. MYeCFO offers both discretionary and non-discretionary investment supervisory services.
Non-Discretionary Investment Management
Clients can also hire us for general investment consulting advice and recommendations without execution authority. We serve as a sounding board and objective third-party to help the client make the most informed decision regarding investment strategy. Although the ultimate decision is made by the client, we may be asked to implement the client’s requests.
Tax Strategy
Efficient Taxpayers pay the least amount of taxes possible given their unique circumstances; they do so without crossing ethical or legal boundaries.
The Inefficiency
Confusing and ever-changing government-imposed taxes are one of the most significant detractors of wealth. Yet, many individuals do not fully integrate their investment and financial decisions with their tax situation. Tax planning and strategy is often done haphazardly or on a one-time basis before the filing deadlines rather than continuously throughout the year.
Our View
Integrating tax strategy with investment strategy achieves the most optimal results.
Our Work
We work closely with our client’s tax accountants to design and implement cost saving strategies, such as:
- Providing an additional review and opinion related to the filing of all state and federal tax returns (we do not file the tax returns, simply ensure accuracy and efficiency)
- Maximizing investment asset allocation efficiency
- Designing and implementing tax loss harvesting strategies
- Recommending tax efficient investment vehicles and financial products
- Advising on effective charitable contributions
Wealth Management
Our Work
We consider our clients as the CEOs of their household. We serve as the efficient Chief Financial Officer (eCFO) to execute their unique visions and to source and manage other team members. We pride ourselves as efficient project managers of our client’s financial affairs. Every client provides us with a list of prioritized projects, which we then help take from beginning to end. We will accomplish the project ourselves and/or leverage a vetted network of external advisors including:
- Bankers
- Estate Attorneys
- Insurance Specialists
- Real Estate Agents
- Brokers
- Education Consultants
- CPAs
- Career Coaches
Efficient Managers of Wealth spend the least amount of time, energy, and money managing their personal finances while achieving the highest possible benefit.
Our View
The client is the CEO of the household; we help execute the CEO’s vision.
The Inefficiency
Having the right strategy is important to success. Executing on that strategy is critical to success. Our clients are busy entrepreneurs, professionals, and executives. They generally do not have the time, expertise, and/or interest to learn every detail of the investment and money management industry. Effective managers of wealth hire the right teams, outsource non-critical tasks, and spend their time efficiently.