The Power of a 3 Step Review
At Armor we encourage you to perform a three-step review whenever you have a financial decision to make. The components of a three-step review are how will this decision affect my taxes, how will this decision affect my cash flow and how will this decision affect my exposure to risk. We recommend that you use a three-step review in your day to day finances and we use it frequently in client meetings.
The first step is a review of your tax return to examine your current tax situation. We identify pitfalls such as incorrect applications of taxable and tax-deferred strategies, as well as a discovery of missed opportunities for offsetting gains and losses. Utilizing gains and losses to minimize tax could be as simple as selling a losing stock to offset a capital gain on a mutual fund. The income tax segment of our review can help you implement an effective strategy to reduce or eliminate taxes and find money falling through the tax cracks – now and ongoing.
The second step is a cash flow analysis to determine if you have your income sources maximized for return and in the most tax-efficient manner. If you have adequate income sources in place now to meet your needs, have you prepared for inflation and the negative effect it will have on your income in the future?
The third step is risk analysis to make sure your current investment risk exposure is one you are truly comfortable with and is appropriate for your portfolio. Research shows that people make poor decisions and experience losses because they actually are taking on more risk than they are aware of. Often they determine that they are uncomfortable with their actual risk level at a volatile time in the investment which leads to a poorly timed decision. A thorough analysis in our 3 Step Review will assure you of your actual risk tolerance/comfort level and help you avoid losses you are not prepared to experience or were not aware you were exposed to.
The wonderful benefit of our 3 Step Review is that the process applies to any financial decision you have and it helps to stop your money from falling through the cracks. It also fosters financial confidence. It assures that any major financial decision is right for you.