Letters to L + C: Reflecting on 1 Year of KKFP

And just like that, it’s been an entire year since my inaugural blog post for KKFP - to those of you that remember that first post, I’m so glad you’re still here!

Today's post is another entry in my mini-series called “Letters to L + C” which I’ve dedicated to my young daughter and son (aka L + C). When my kids are old enough to read this series, I hope the stories inspire them to be brave and do hard things on their path ahead. 

DEAR L + C,

Someone should’ve reminded me that for parents with elementary-age kids (Moms especially…), the month of May is an absolute frenzy. Simon Holland said it best on Twitter:

“It’s the last month of school, here are 97 activities in the middle of the day parents need to attend” -elementary schools

Despite the craziness of these last few weeks, I took time to reflect on everything that happened during the first year of my financial planning business.

PRACTICE WHAT YOU PREACH

It’s no secret to the both of you that we had our personal ups and downs as a family over the past year as I made this career pivot. It’s a shift your dad and I never would’ve considered had we not done the very financial planning work I now do with clients, particularly around envisioning our financial and life goals, managing our savings, and adapting our spending plan. Even the very psychology of money we lived by was tested and shaped anew as we embraced entrepreneurship.

We had our fair share of financial surprises this year (our house getting struck by lightning and your dad getting laid off the month before I launched KKFP, to name a few…). Still, I credit our disciplined savings strategy and healthy spending habits, shaped over 5+ years leading up to this point. I’ve found so much fulfillment in bringing these lessons and more advanced strategies to meet the needs of the client families I now get to serve.

ADDING VALUE FOR KKFP’S IDEAL CLIENTS

I set out to build a business that serves professional women and their families because they deserved financial guidance from someone that understood what a day in their life felt like. They deserved the option to partner with someone who could save them time, boost their financial confidence, and help them proactively grow their wealth.

For professional women in particular, I understood their unique mental load and wanted to offer them relief, namely the organization and process around managing their financial life. 

Suppose more financial planners catered specifically to successful women in their early to mid-career. In that case, they’d have a better chance of optimizing their high-income years to build long-term, sustainable wealth. More importantly, these women would be free to focus more on themselves - their career path, marriage, kids, friendships, or whatever they valued most.  

Looking back on that original mission, I understand better who I want to serve with this business.

KKFP’s ideal clients are:

• Millennial professional women and dual-career couples with young kids (or they’re hoping to start a family someday soon)

• Women who typically work in a male-dominated career such as Finance, Tech, Big Law, Engineering, etc.

• Couples where the woman typically makes as much as or more than her partner, and both are invested in professional growth

• W-2 employees where household income is around $250K or more; earned income includes large cash bonuses and/or equity compensation

• Looking for a collaborative, more profound relationship with a financial advisor

• Hoping to focus on their interests rather than managing their investment portfolio and financial life

• Not trying to time the stock market because they believe money and investments are a means to an end

• Seeking the advice of an expert and are ready to delegate the design and management of their financial well-being because they didn’t have the time to handle any of it in the first place

• Looking to work with me for the long term because they understand that the value of ongoing financial planning grows over time

I borrowed from Michael Kitces’ 101 Ways Advisors Can Add Value For Their Clients to hone in on the specific ways I was able to guide these individuals and families over the past 12 months:

Cash Flow Management

• Aligning spending with values and goals

• Allocating and bucketing cash by future wants and needs

• Analyzing a job change (base salary, bonus, equity compensation, and employee benefits comparison)

• Planning for and building an emergency fund

• Analyzing expenses to find and remove unnecessary services/costs

• Finding better high-yield savings account options to optimize returns on cash holdings

• Planning for a sabbatical

• Reviewing personal credit cards and rewards

• Deciding targets for how much cash to keep in savings and planning for the extra cash (spend on short-term wants/needs, add to investment accounts, etc.)

• Planning for a large purchase (vacation home, home renovation, etc.)

Debt Management

• Creating a total debt payoff plan

• Deciding where to devote debt payments

• HELOC (Home Equity Line of Credit) analysis

• Analyzing home mortgage refinance options

• Mortgage comparison/analysis when buying a home

Education Planning

• Comparing, selecting, and setting up 529 College Savings Plans with ongoing plan maintenance

• Creating a plan to fund college with various investment savings accounts like the 529, UTMA/UGMA (Uniform Transfer/Gift to Minors taxable investment accounts), taxable brokerage accounts, and/or Roth IRAs

Insurance Planning

• Curating a team of insurance professionals to shop for affordable coverage

• Analyzing short- & long-term disability insurance needs

• Comparing high-deductible health plan with HSA vs. low-deductible health insurance coverage

• Assessing the need for term life insurance

• Reviewing property/casualty insurance coverage (homeowners, auto, umbrella, etc.)

• Planning and selecting benefits during workplace open enrollment periods

Investment Planning

• Creating an investment plan/investment policy statement

  • Understanding risk tolerance/risk capacity alongside age, time horizon, and overall investment account goals

• Deciding on the split between stocks and bonds and making adjustments to this asset allocation over time

• Asset location analysis/adjustments

• Handling concentrated stock positions

• Investing an inheritance/windfall

• Moving to lower-cost investments

• Portfolio rebalancing execution

• Analyzing rental real estate

• Creating an investment portfolio withdrawal strategy

Tax Planning

• Adjusting strategies for changes in tax policy

• Adjusting tax withholding/allowances

• Capital gains harvesting analysis

• Charitable giving location planning (donor-advised fund, appreciated stock, etc.)

• Curating a team of tax professionals

• Reviewing annual tax return

• Roth conversion analysis

• Standard vs. itemized deduction analysis

• Stock option planning

• Tax credit analysis/opportunities

• Tax loss harvesting analysis

Retirement Planning

• Analysis of how much to contribute to retirement accounts each year

• Analysis of Roth vs. Traditional 401k plan account

• Considering backdoor and “mega” backdoor Roth IRAs

• Determine when clients are considered financially independent (i.e when will work be optional?)

Estate Planning

• Review potential trust options, funding of trusts, and re-titling of assets

• Gift planning

• Recommending/curating estate attorneys

• Guidance on creating/reviewing the most crucial estate planning documents

  • Will and guardianship for children

  • Financial power of attorney

  • Advance medical directive

  • Healthcare proxy

Psychology of Financial Planning

• Developing and envisioning financial/life goals

• Financial coaching for the implementation of planning recommendations

• Identifying money scripts and managing how they affect financial decisions

• Offering peace of mind by tracking financial life

• Support in overcoming financial biases

• Support in overcoming the investment behavior gap

NO TURNING BACK

It’s incredible to see my clients' progress as they work to put their custom financial strategies into place - the joy of being part of the journey is something I can’t understate. I see so much of my life in my work with them.

Every so often, there’s that small voice in the back of my head asking, “How could you quit your great corporate job to start this business?!”

I welcome that occasional imposter syndrome as a friendly reminder that without some calculated risk comes no reward. I can only hope it’s setting a lasting example that you both will be proud of as you discover what you’re passionate about and how you want to design your career and life.

With love,
Kelly aka Mom

If you’d like customized help using your financial resources effectively in order to make the most out of your wealth-building years, please schedule a free consultation here or email me with questions kelly@kkfp.co

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Disclaimer: This blog post is not intended to be a substitute for specific financial, tax or legal advice. The article is for general informational purposes only. Reproduction of this material is not permitted without written permission.