Explore HoW WE WORk TOGETHER
SHERMAN WEALTH CASE STUDIES
Client Pain Point:
Sam and Julia are a dual-income married couple living in Washington, D.C. in their late thirties, raising their 2-year-old daughter, Claire, and are pregnant with another child. They own a condo in D.C that needs renovations and will need to move to a bigger home once their second child arrives. They are also beginning to think about college savings for their daughter and soon to be second child, the need for a will and life insurance, retirement savings for themselves, how they will afford and maneuver the sale of the condo and purchase of a new home, as well as adjusting their budget as Julia is moving to a part-time salary. They both have large 401(K)’s from their old companies that they are unsure what to do with, as well as an abundance of cash sitting in their checking account.
As their life is becoming more complicated and their family expands, priorities and goals are also shifting. Even though Julia and Sam do not have millions of dollars in investable assets, they are both quite successful, yet feel overwhelmed and do not know where to turn. They are looking for a financial concierge to simplify their financial life and coach them through these tough decisions.
Sherman Wealth Value Add:
Our main goal when working with Sam and Julia was to establish a trustful and open line of communication and to improve their financial knowledge on a variety of topics, so they feel confident about their financial decisions. We believe that utilizing our risk tolerance software and understanding and talking through their goals, budget, and priorities helped build a solid baseline before attacking their other pain-points and action items.
Action Items We Found: We analyzed their workplace benefits and found that both Sam and Julia needed an additional life insurance coverage along with a will to protect their family and naming a guardian for their children. In our analysis, we found that they needed to add a beneficiary to Sam’s 401(K), open a high-yield savings account for their emergency fund previously earning 0.01%, reconstruct their budget to account for new priorities, begin saving for college thru a 529 account with a monthly contribution that fits in the budget, adjust their asset allocation within their 401(k)s to match their newfound risk tolerance, save outside of retirement, and max-out their 401(K)s (both Sam & Julia were unaware of the 2022 contribution limit). We also suggested they both contribute to a Roth IRA as they fall under the limits as well as consolidating old retirement accounts. With our analytical software, we ran an analysis of their old 401(k) and found a very limited fund-lineup as well as very expensive hidden fees within their asset allocation, so they wanted Sherman Wealth to manage their rollover 401ks for more tax and cost efficiency.
Through a series of actionable and meaningful meetings with Sam & Julia, they now are aware of where they are, what they have, and how to get to where they want to be. Sherman Wealth was able to help calculate and analyze contributions to each goal listed above, set them up with all the new items mentioned above, monitor their investments, and continually track their progress and update their financial picture as life events occurred.
Client Pain Point:
Emily and John are in their early forties and reside in a purchased home in Bethesda, Maryland with their two young children. Emily owns her own local marketing firm with about 10 employees, and John, who works at a publicly traded tech firm, has RSU’s and will be coming into a lot of money and needs help with his options. John and Emily currently work with a family advisor at a large institution and are unhappy with the lack of personalized service they are receiving and want to be educated on finance to make their own independent decisions. Emily is not well-versed on the fees she is paying her payroll and 401(K) companies and has many questions on the employer matches, employee education, and how to benefit the company and her employees the most.
Their life has a lot of moving parts as they are busy with their small children, carpooling to school and after-school activities, have multiple house projects going on, and are currently navigating a small business. Together, they make a lot of money and have a lot of cash, but just don’t know what to do with it.
Sherman Wealth Value Add:
As you can tell Emily and John have A LOT going on in their day-to-day life, and are seeking answers to some of these more complicated scenarios. Our main goal working with Emily and John is to establish a long-term trusting relationship, where they feel comfortable and valued as clients and to help them solve these “question marks” in their financial plan.
Action Items We Found: First and foremost, after analyzing Emily’s 401(K) plan docs, we found that her current 401(K) platform incurs a great deal of hidden fees and zero customization as it relates to employee options and benefits. We recommended a new, cheaper and more seamless 401k platform along with our personalized employee education consulting service to add value to both the employer and employees. With low interest rates, we suggested it was a great time to think about refinancing their home and taking out a HELOC for the upcoming home projects.
Utilizing our tax-planning software, we analyzed both their individual and S-CORP tax return to solve for some tax strategies, and also found that she could benefit from a profit sharing option as well as adding a Roth feature within the 401(K). Next we set up a game plan for John’s upcoming company vests and set up monthly conversations to re-evaluate those decisions. John and Emily have a lot of cash between the small business and John’s job, yet have it sitting in a checking account. We recommended putting some of that shorter-term cash to work with minimal risk in higher rate CDs while they await their home project. John and Emily are looking for a constant reliable source to bounce financial ideas off of and to keep them accountable in terms of building up their savings. We recommended they establish a new joint investment account with us to build their non-qualified assets and maximize on their opportunity to save.
Through a series of 4-5 upfront meetings and now monthly to quarterly meetings, we continuously update Emily and John’s financial plan, have seamlessly integrated Emily’s 401(K) to a new platform and host quarterly lunch and learns for her employees on their workplace benefits. We also helped them solve for cash flows and savings buckets and continue to assist John throughout his upcoming stock vests, leaving them feeling confident about their financial future and anything that is thrown at them along the way.
Client Pain Point:
Cheryl is a 29 year-old single woman living in New York City navigating her career, family, dog, friends, and life in a big city. Cheryl rents an apartment in Manhattan and works for a large marketing agency. She recently switched jobs and received a significant raise and is feeling lifestyle creep impacting her finances and decision making. She has had 4 or 5 jobs in the past and has yet to do anything with her old 401(k)’s and is thinking about taking the next step and purchasing her own home to potentially start a family. Cheryl knows she is young but intends on retiring early and traveling the world so she wants a better picture of what her retirement will look like. She has a lot of cash lying around in different checking and savings accounts and spends a lot of money on her old student credit card at amazon. Cheryl has done very well for herself yet does not feel empowered by her finances to make her own financial decisions at this point.
Sherman Wealth Value Add:
To help Cheryl build a comprehensive financial plan, we first had several meetings with her to truly understand her goals, discuss intentional spending, priorities, risk tolerance, and intentions while working with an advisor.
Action Items We Found: Utilizing our risk tolerance and analytics software, we analyzed everything she had, all her old, maybe “forgotten accounts” and found given high expense ratios, she needed to consolidate all her old 401(k)’s into an IRA as well as add a beneficiary to her retirement accounts. We also found she needed to consolidate her bank accounts (choose one or two accounts for her money), open a high-yield savings account for her emergency fund, and recommended she open an Amazon credit card due to her high spending there to see some rewards later on.
Next we discovered that her workplace benefits did not sufficiently cover her insurance so we introduced her to a life insurance specialist while she can still get great inexpensive coverage. Because early retirement was an important goal to Cheryl, we talked through her pre-retirement and retirement spending to project what her retirement would look like and what it would take to get there, including maxing out her 401(k) contribution. Additionally, because Cheryl felt that she was being impacted by lifestyle creep, we discussed the importance of intentional spending and created a comfortable budget for her to follow in her day-to-day life as a city girl and built out buckets for her to save for her potential house purchase and travel fund.
Cheryl was definitely headed in the right direction with her finances, yet needed some more granular guidance to get her to the right place. After working with Cheryl for several months and providing her with actionable items to work on, she is now left with a comprehensive roadmap feeling confident and empowered on making her own financial decisions.
Disclosure & Disclaimer: The case studies listed above are entirely educational and not presented as advice. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. See disclosures page for more information or contact us with questions at info@shermanwealth.com.