Available funds are liquid cash that you have given yourself to spend. We will identify or create an account that is your source of readily spendable dollars. A checking or savings account is fine for this. All your desired spending flows into this account from sources like your earned income, social security, pensions, or investment distributions. Understanding how much money you want to spend is a number we call Lifestyle Definition (LD for short).

The goal is to have a month or two of your LD in Available Assets, but everyone finds their own comfort level. These dollars typically earn almost nothing so if there is a surplus you want to sweep this over to your Buffer Accounts and ultimately your Compound Investments.

Ideally for distributors the rate of distribution needed to cover LD is 3% or less of your C account balance. The percentage is what we call your “spend rate”.

Your Buffer serves as a “buffer” for your cash flow from volatility: both in investment market fluctuations and personal spending surprises. It is a segregated investment or account used for anticipated and unanticipated expenses. The goal is to cover both what you can see coming in the next few years and any surprises or opportunities that appear unplanned.

Accumulators can budget for as little as two months and generally not more than six months of your LD. Distributors should have two to five years’ worth of your LD, depending on your spend rate. The funds in your B account protect the Compound investments from being forced to distribute too much money at an inopportune time.

Buffer accounts are allocated to be readily available over short periods of time, but still earn more interest than Available funds.

Compound assets are invested to produce the lifestyle you want in the future and transfer a financial legacy to the next generation and your community. So, our goal is for you to invest as much as possible beyond your A and B accounts.

Everyone understands that risk and return go hand in hand, but our experience reminds us that life waits for no one. This means it is paramount have your lifestyle defined, available and buffered before you start taking longer term risks. Markets are volatile and the ups and downs are all part of the opportunity. This makes the cardinal sin of investing a forced liquidation of a good investment when it has dipped in value, and the ABC’s of Cash Flow prevents this from happening.

It is good to get clear about just what is or is not a Compound Asset. These can be stocks, mutual funds, ETFs, IRAs, 401k’s, real estate partnerships and businesses. They need to be allocated in accordance with your risk tolerance profile or investment policy statement on a global basis with all your various long-term investments intended to support you in the future. An ideal “spend rate” (the percentage of your C accounts that you distribute each year) is 5% or less.

Spending at this rate allows your C account to have the potential to continue to grow faster than taxes and inflation, preserving your lifestyle.

These portfolios are typically used when a more traditional model portfolio doesn't suit your situation, needs, or desires for one or more of your accounts. Common examples of these portfolios include:

• Institutional Intelligent Portfolios - These are built on a technology-driven platform which includes automatic rebalancing, no transaction fees, and fully digital account opening and servicing.
• GP Stock Portfolio - In 2024 we partnered with Greg Palmer, an investment advisor, who has had success managing individual stock portfolios for his clients. These portfolios consist of 25 U.S. Large Cap, dividend paying stocks. This is a buy-and­ hold strategy with minimal turnover.
• Antolino Top 10 Stock Portfolio (ATT) -This is a portfolio of 10 dividend paying stocks that must meet strict criteria to qualify for the portfolio. Examples of these criteria include a certain dividend yield, dividend growth rate, P/E ratios, and meet certain third-party rating standards.
• Separately Managed Accounts (SMA's) - These portfolios allow you to essentially own all the individual securities within a mutual fund while offering customization, control, and tax efficiency not available by owning the fund. These accounts typically require a minimum of at least $2M.
• Buffered Exchange Traded Funds - These funds track an index (i.e. S&P 500) and use embedded options to create a buffer of downside protection over a certain period (typically one year). This is a "cap and cushion" strategy that will have performance like its underlying index but with guardrails.
• Customized Bond Portfolios - We use a combination of Investment Grade corporate bonds, Muni bonds, treasuries, CDs, and money market funds to build a ladder that aligns with your specific cashflow needs. These are typically created for buffer accounts.