Personal Financial Planning for Executives and Entrepreneurs: The Path to Financial Peace of Mind

By Michael J. Nathanson, Jeffrey T. Craig, Jennifer A. Geoghegan and 7 more

Effective financial planning for executives and entrepreneurs is complex, dense, and impossible to reduce to a single, easy-to-understand formula. Designed to emphasize the importance of effective, targeted financial planning, this book begins by telling a story about a fictional, but plausible, power couple and their family who (spoiler alert!) do pretty much everything wrong in securing their financial future. In most cases, they don’t do the things needed because they don’t know what they are. Using this story as a case study of executives and entrepreneurs, the book breaks down the case into chapters and offers practical discussions of all the key financial planning pillars—investment planning, tax planning, estate planning, philanthropic planning, risk management, and equity-based compensation to name a few—with the tools needed to tailor a plan for virtually every circumstance and need. While there is no single plan that works for everybody, this book will provide a guide with complicated, technical information alongside specific guidance on how to build an effective financial plan.

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Nov 12, 2018
• ISBN: 9783319984162

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© The Colony Group 2018

Michael J. Nathanson, Jeffrey T. Craig, Jennifer A. Geoghegan, Nadine Gordon Lee, Michael A. Haber, Seth P. Hieken, Matthew C. Ilteris, D. Scott McDonald, Joseph A. Salvati and Stephen R. StelljesPersonal Financial Planning for Executives and Entrepreneurshttps://doi.org/10.1007/978-3-319-98416-2_1

1. The Story of David and Goliath, and Abby and Samson: A Journey with No Direction

Michael J. Nathanson¹  , Jeffrey T. Craig²  , Jennifer A. Geoghegan³  , Nadine Gordon Lee⁴  , Michael A. Haber³  , Seth P. Hieken¹  , Matthew C. Ilteris¹  , D. Scott McDonald²  , Joseph A. Salvati¹   and Stephen R. Stelljes²  

(1)

The Colony Group, Boston, MA, USA

(2)

The Colony Group, Hingham, MA, USA

(3)

The Colony Group, New York, NY, USA

(4)

The Colony Group, Armonk, NY, USA

Michael J. Nathanson (Corresponding author)

Jeffrey T. Craig

Jennifer A. Geoghegan

Nadine Gordon Lee

Michael A. Haber

Seth P. Hieken

Matthew C. Ilteris

D. Scott McDonald

Joseph A. Salvati

Stephen R. Stelljes

David grew up in a rural town in Connecticut. His parents worked on an assembly line at Goliath Assembly Company, earning just enough money to support David and his two younger sisters. He lived in a modest house, attended public schools, and enjoyed a stable, unremarkable childhood.

Neither of David’s parents had attended college, but they were keenly aware that the world was changing—in a way that seemed to place a growing premium on formal education. They told their children that they would one day need to attend college and that they would support them in any way they could. David’s parents were firm on one point: college would not be optional for their children.

David’s mother and father were both thrifty and, of necessity, disciplined about their spending. They saved what they could, but they didn’t worry too much about their financial future, let alone think about retirement. Like many in their generation, they assumed that Social Security and Medicare would take care of their retirement needs, allowing them to spend their hard-earned money where it counted most: on supporting and nurturing their family. They didn’t feel that they had any choice in the matter. They just didn’t have much in the way of discretionary income, and, on their fixed salaries—which increased on occasion to account for the effects of inflation—they couldn’t afford to worry about the future, including saving money for retirement or buying insurance for seemingly abstract concepts like long-term care, disability, or untimely death.

David was a good student, and, to the delight of his proud parents, David went on to become a three-sport varsity athlete in high-school. Smart and handsome, David was popular, had quite a few girlfriends, and generally enjoyed his four brief years in high school. At the beginning of his senior year, he became friends with Abby, who graciously agreed to be David’s prom date after David summoned the courage to ask her.

Abby lived on the other side of town from David; but she, too, came from a good, hard-working family of modest means. Abby was David’s natural match in almost every way. The two had actually known each other since the sixth grade, where they were both placed in their school’s accelerated track for academically higher-performing students. And while Abby was David’s academic equal, she was also his athletic equal, being a three-sport varsity athlete herself. Their friends and even their parents had always suggested that the two should be a couple, but it wasn’t until they sat next to each other in an SAT preparatory class that they became friends and the start of something more occurred.

After scoring well on his SAT and laboring over his college applications with his guidance counselor, David was accepted into Connecticut College. Equally importantly, with some very modest help from his parents, a generous aid and loan package from the school, and a part-time job as a waiter, he found the money to attend.

In college, David excelled as a student, especially at business-related subjects like economics and accounting. By his junior year, he knew that he wanted to pursue an advanced degree in business administration and hopefully a career in business. Like many his age, he dreamed of a bright future for himself and for the family that he would have one day.

All in all, things were going very nicely for David. He took the GMAT (graduate management admission test) at the beginning of his senior year in college, and his score was in the top 1% of all test takers—on his first try! Coupled with his 3.88 GPA at Connecticut College, at which he also participated in an extensive work-study program, he had his choice of just about any business school he wanted. He knew which one he would choose before he even had to make the decision: Harvard.

An MBA from Harvard would make his parents proud (and it wouldn’t look too bad on a resume either)! But even better, Abby, who had maintained a not-too-long-distance relationship with David throughout college, was living in Massachusetts and planning to pursue a master’s degree herself—in Mass Communications from Boston University.

Abby, too, had excelled during her years in college. An avid reader and natural writer, she had double-majored in English and communications at Boston College. She graduated near the top of her class, Phi Beta Kappa, with highest honors, and envisioned a career utilizing her specialized knowledge and skills as an entrepreneur focused on marketing consulting and online design.

Only a year later, David and Abby were engaged. The following year, David graduated with a master’s degree in Business Administration, while Abby graduated with a master’s degree in Mass Communications. The newly-minted graduates were married that fall, with their friends and family now playfully (but accurately) referring to them as a power couple. Of course, between the two of them, they also owed Harvard, Boston University, Connecticut College, and Boston College $350,000 in student debt; but they’d pay that off quickly with all of the money they were going to