The Investment Scientist

How I Help a Client Save $100k in One Meeting

Posted on: August 12, 2013

ImageI go to great lengths to meet with my clients regularly. For instance, many of my clients live across the country. I fly to them.

Some might ask: what value is there in meeting regularly? There can be about $100k of value in it, let me tell ya!

Meeting regularly allows me to uncover hidden issues and potential opportunities, thereby helping my clients make smart financial decisions.

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Take my recent trip to LA. My client started off by saying not much had changed, so there wasn’t much to talk about. So we settled into what he thought was casual chit-chat.

Little did he know that my chat-chatting was actually very purposeful. I soon discovered that my client’s mom, who lives in Taiwan, wants to donate her life savings, a total of $200k, to a Buddhist charity in the US and she wants my client to help her handle it.

She also does not want to give it all in one fell swoop. She wants to doll it out over a period of time to maximize the impact.

This is a lot of work on my client’s part. He will have to travel to Taiwan to get his mom’s power of attorney, translate it and notarize it so he can transfer her account to the US and manage it here.

Then he has to get a W8 form and a copy of his mom’s passport…yada yada yada… let’s just say it’s like untangling the Gordian knot.

Upon hearing this, I made a suggestion: his mom can give him the money, and my client can then put the money into a donor advised fund (DAF). This is the financial equivalent of Alexander the Great slicing through the Gordian knot with a sword. It achieves the following:

1. There is no more great Grecian knot to untangle.

2. He can write off the donation. Since he lives in California and is in the highest tax bracket, he is going to save $100k in combined state and federal income taxes!

3. The money in the DAF can grow tax free and the timing of giving it to the actual charity is entirely up to him and his mother.

See, I just helped him solve a problem and ended up saving him $100k in the process. That’s the value I bring to the table. My goal is to keep my clients wealthy by helping them make smart financial decisions every step of the way. Aren’t you worth it?

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2 Responses to "How I Help a Client Save $100k in One Meeting"

Nice story on huge savings. I’ve seen many instances where a good financial plan way more than paid for itself in savings.

Thanks Bob for commenting. With time passes, I am more and more convinced of my value. People make wrong financial decisions all the time, and I can help. I like to think I am a ten bagger. The value I bring is ten times the fee I charge.

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC. He is also a regular contributor to Morningstar Advisor and Physicians Practice. To explore a long-term wealth advisory relationship, schedule a discovery meeting (phone call) with him.



You may also get his monthly newsletter, or join his Facebook page for regular wealth management insights. Michael's email is info[at]mzcap.com.

Twitter: @mzhuang

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