Case Study: Determining When You’ve Saved Enough For the Future

Challenge: How do you know when “enough is enough,” and then act on it?

We all like success stories. How ironic, then, that many of us don't take the time to define what financial success means to us. Without a clear vision of "how much is enough?" we are prone to making poor decisions or even failing to act. This story illustrates how easily our individual success stories can be derailed.  


Investor’s Concerns

A man works for a large biotech company. He is thriving and life is good. His stock options are worth $8 million. A few years pass. These same stock options are now worth $5 million. Although his net worth has dropped significantly, he is still grateful for what he has. He sees the glass as half full instead of half empty. A year later life is not so good. His options are now worth only $1 million. What's more, he is being laid off as one of the casualties of this volatile industry. Only then does he turn to a trusted advisor for support.


Strategy and Solution

The advisor asks him what he needs in order to meet all of his financial objectives. The man replies that $1.5 million to $2.0 million would be plenty. The advisor asks the man why he hadn't liquidated some of the options back when they were worth $8 million. He could have liquidated half of the options, paid taxes on the gain and been left with plenty of money to meet all of his financial goals. And he would have still held a healthy chunk of stock options.


Result

Sometimes the smallest steps make the biggest difference. Had this man paused to map out his financial future, things would have turned out differently. Most likely he would have had sufficient money to cover his needs in the future, and then some.  

At Cornerstone Wealth Management, we guide our clients toward peace of mind by helping them clearly define their financial goals. We help them write their "success story." Then we design and implement a plan to help them achieve it.


Back to previous page



Disclaimer: Information provided is for illustrative purposes only and should not be considered investment advice. The information provided is hypothetical in nature, does not reflect actual investment results, and is not a guarantee of future results. No reliance should be placed on any such information when making an investment decision. Nothing herein is intended as an endorsement by any person of Cornerstone nor should the information be construed as a statement of a typical client’s experience with Cornerstone. No guarantee of investment performance is being provided and no inference to the contrary should be made.