April 30, 2013

I Wanna Be a Billionaire

Credit: -Marcus-
Earlier this week, I spent a fair amount of time reading a very technical, highbrow article about many things someone could do with their wealth to build an enduring legacy. The article was very useful, and I even learned some new financial planning techniques and strategies I may mention to some of the clients I serve, but in the words of Ron Burgundy (Anchorman reference), it reeked of “leather-bound books and rich mahogany.”

I want to be clear - there is nothing wrong with a good leather-bound book or a rich mahogany bookshelf, but that article was simply not for everyone. I’d go so far as to say it was written for only a very small group of people. Now I always tell all of my clients the truth and try to give all of my clients the same advice I would give my mother if she were in their shoes, but the thing is, the clients I serve are very, very different from one another. Some have cufflinks, some have holey blue jeans. Some like beef wellington, some like a hamburger steak (I’d take the hamburger steak, myself!). There’s nothing wrong with being different, and quite frankly, I enjoy the daily challenge of being a financial planning “chameleon” as I tweak my approach, tactics, and explanations to try to provide the best advice I can in a manner that each, unique client can relate to and understand.

I tell you all this so you can hopefully appreciate my motivation behind today’s post. Today, I offer some financial thoughts and commentary for you to think about as you live your life and consider what type of legacy you want to build, and one day, leave behind. I’m attempting the same thing as the author of the aforementioned highbrow article, but I don’t think overly-technical speech and a rich mahogany vocabulary are always necessary when trying to help people financially. Here goes nothing, but let’s see what I can do with a slightly “PG-13ed” excerpt of Travie McCoy and Bruno Mars’ “Billionaire,” a reggae, pop rap song about what McCoy would do if he had a billion dollars. The song lyrics are italicized and green; my commentary is in parentheses and black.

I wanna be a billionaire so freaking bad
(You and me both!)
Buy all of the things I never had
(There’s nothing wrong with prudently spending some of your hard-earned money. You need to save, you need to pay down debt, and you need to invest, but it’s important to remember that when your time comes, you can’t take your money with you!)
Uh, I wanna be on the cover of Forbes magazine
(It’s true, with personal or financial success there often comes fame and public attention, so you need to be careful. Even if you don’t quite make the cover of Forbes, it’s probably a good idea to have a substantial umbrella policy like we discussed in "Surviving Mayhem," or one with liability coverage close to your total net worth.)
Smiling next to Oprah and the Queen
(As I’ve gotten older, I realize more and more that there is sadly some truth to the phrase, “It’s not what you know but who you know.” If that is indeed the case in this cruel world, at least try to leverage your contacts and relationships to do good and make a difference!)
Oh every time I close my eyes
I see my name in shining lights yeah
A different city every night alright
I swear the world better prepare

For when I'm a billionaire
(The world better prepare and so should you! Planning in advance and examining the pros and cons of a life or financial decision before you make it is absolutely crucial. You don’t want to start a business and then worry about the wording in the partnership agreement, you don’t want to begin thinking about saving up money to send your kid to college when they’re already a senior in high school, and you don’t want to weigh the impact of choosing an annuity pension versus taking a lump sum at retirement for the very first time on your last day on the job!)
Yeah I would have a show like Oprah
I would be the host of everyday Christmas
Give Travie your wish list

(You can currently give someone up to $14,000 per year without their being any gift tax consequences.)
I'd probably pull an Angelina and Brad Pitt
And adopt a bunch of babies that ain't never had stuff

(Adopting is a wonderful thing to do. If you want to help, but you’re not in a position to adopt, there are many, very good charities you can assist with your time or resources that benefit children in need.)
Give away a few Mercedes like 'Here lady have this'
(Please talk to your financial advisor, insurance agent, and family BEFORE you give away a Mercedes!)
And last but not least grant somebody their last wish
(Contributions to the Make-A-Wish Foundation are tax-deductible…)
…I'd probably visit where Katrina hit
And do a lot more than FEMA did…

(Once again, there are numerous charitable opportunities where you can make a difference. Oftentimes in the case of a major disaster, you can specifically direct your contributions with many national and international charities.)
…Toss a couple million in the air just for the heck of it
(Please don’t.)
But keep the fives, twenties, tens and bens completely separate
(It is critical that any money of substance you have accumulated be diversified and secured. Investments need to be properly allocated, too much cash in one bank account isn’t as secure as it could be and the interest isn’t going to keep up with inflation anyway, and having cash stuck under the mattress can be a huge security risk (theft, fire, etc.))
And yeah I'll be in a whole new tax bracket
(You got that right! The new top federal tax rate is 39.6%. Add in state taxes, payroll taxes, and the Medicare surcharge, and your overall tax rate is likely getting on up there. It’s always a good time for tax planning with your CPA or financial advisor.)
We in recession but let me take a crack at it
I'll probably take whatever's left and just split it up
So everybody that I love can have a couple bucks

(It’s important to have an up-to-date estate plan in place. The current estate exemption amount is $5.25 million per person, so many people will not face estate taxes, but with as many tax laws that have changed in recent years, you need to make sure your money is still going where you want it to go!)
And not a single tummy around me would know what hungry was
Eating good, sleeping soundly

(It is more blessed to give than to receive.)
I know we all have a similar dream
Go in your pocket, pull out your wallet
And put it in the air and sing…

We can’t all be billionaires, but it is fun (and important) to think about what we can do with what we have. I’ve got a meeting later this week with a couple, and we are going over their estate plan to do just that. Perhaps, I’d better split the difference and go with something between rich mahogany and reggae lyrics. Either way, if you feel like your life and your purpose are bigger than just you, I encourage you to think about what fingerprints you’re leaving behind. Please keep in mind that your actions and your finances can be powerful tools in leaving a legacy that you can be proud of.


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