Baby Boomers in Business…Soon to Exit….

I recently attended a fantastic 2-day conference on wealth management put on by the Southern California Institute (www.scinstitute.org). Here are some statistics – and you’ll soon understand that this is a crisis: Baby Boomers own 63% of the businesses in USA.  80-90% of the wealth is in their business. 76% wish to transition from their businesses in the next 10 years. This represents 4.5 million businesses, and +$10 trillion in wealth. However, only 49% have a transition plan. Of all the businesses that are put on the market to sell, only 30% are sold. Of all the businesses – only 30% of family-owned businesses make it to the 2nd generation and only 12% survive to the 3rd generation. The bottom line is this – very few plan and therefore are at significant risk of accessing the wealth in their business after sacrificing untold hours running their businesses. That’s awful! How can business owners exit their business? There are 4 “inside” options and 3 “external” options. Inside: Intergenerational Transfer, Management Buyout, Sale to Existing Partners or Sale to Employees. External: Sale to 3rd party, Recapitalization, Orderly Liquidation We are ignoring taking the company public (IPO) since that represents such a tiny percentage of companies. We urge all Baby Boomer business owners to strongly consider professional help with transitioning their businesses. Keep in mind that excellence in “exit planning” is simply excellence in business planning. The owner is growing the company, increasing profits, making it easier to run  – so they benefit now but also so they have a much better chance of a good outcome in exiting the business. We have access to the best resources...

Roth IRA for Hard-working Kids: Over $1M at age 65 tax-free!

Great idea: Act now to set your children on the path to have approximately $1.5M tax free at age 65. Savings from summer jobs starting at age 10 totaling just $17,100 by age 29 can set your children on a wonderful retirement plan. Harness the incredible power of compounding returns over 55 years! Do you have kids (grandkids, nieces, nephews) of any age that are working this summer earning income – or any time during the year? Do you wish for them a more secure future? Two words: Roth IRA. The most powerful retirement account available today. And we’ll help you get this going at no cost – as a public service. How do you turn $17,100 in contributions into $1.5M tax free? Click here to see what this looks like – graph and numbers both. Assumptions are listed in the next paragraph. Assume a child starts at age 10 and puts away $200/year, increasing regularly at the following ages/amounts: 12/$300, 15/$500, 17/$700, 23/$1000, 26/$2000 with the last contribution occurring at age 291. Further assuming an 11% annualized return2 – a reasonable return expectation for a small cap value fund. Click here to see recent returns of a Vanguard, DFA Small Cap Value Fund and related index – graph and numbers both. Note the higher DFA returns. This offer comes with EDUCATION. Your child will learn valuable lessons about hard work, long term commitment, saving, investing and compounding returns. I will be happy to meet with you and your child to explain how investing and compounding returns work. I will answer any and all questions. Note that it is...

How does a Friendly Financial Firm Compare to a Truly Caring Firm?

  It’s pretty rare that someone starts a completely new business from scratch in a thoughtful manner – methodically bringing the business and its philosophy to life. Being able to control every aspect of the pieces coming together. That’s what I did. Besides my faith, my wife, our daughter, our country  – forming and starting O’Reilly Wealth Advisors LLC (OWA) is something that I am very satisfied and proud to have overseen. I thoroughly reviewed the marketplace and discovered that most “financial advisors” are simply making commissions selling various financial products and conducting transactions. “It’s all about them (themselves the advisors).” Even those that are providing advice – do not provide holistic planning financial and close assistance with execution of the plan. They do not make money doing that, so they don’t do it and it is not expected. I decided that my firm’s mantra, our underlying philosophy, is “It’s all about them (the clients)”. As I formed OWA every decision was tested by asking, “Does this decision serve our future clients by maximizing the probability that they achieve their financial goals?” The answer had to be either “yes” or “this decision is neutral to this test”. In my research, as I looked at the process of providing top notch advice, I realized there were at least three areas where the industry is failing consumers: 1) Advice is poor, 2) Advisors are wimpy and not willing to state the truth particularly when it is not good and 3) Advisors are  (wimpy again) not willing to hold clients accountable to act on the advice. Advisors are “asset gatherers” – not advice givers, not coaches helping you reach...

Catholic Seniors Financial Session 2016

Hello to all who attended O’Reilly Wealth Advisors’ Senior Financial Topics Session Saturday, January 16, 2016 AND Saturday, February 20 at my home parish St. Elizabeth Seton, Carlsbad, CA. This blog serves as a depository of links to documents, websites and videos mentioned in my talk, as well as the presentation itself – and additional related information. I also encourage you to look through all our blog posts as you will find great content describing the important concepts we discussed Saturday – and much more. We find the best content as well as creating our own. I added pertinent links not discussed in the sessions such as the US Bishops Statement on Euthanasia. I added a link on California’s passage in October of an euthanasia law which is why there is a renewed emphasis on insuring your Health Care Directive is congruent with Catholic beliefs. Be vigilant! More links we added since January. We found out about a free smoke detector program in SD County and have Know that we regularly conduct discovery meetings for anyone that requests them. It is the most important meeting we conduct because it establishes the reasons that drive you to be a good steward of your financial future (your “why”) and your specific tangible financial goals. Without these two critical pieces of information an appropriate financial plan cannot be written – and is unlikely to be executed over time. We also will critique your existing investments for you at no charge. Documents/Links: PowerPoint Presentation US Catholic Bishops’ Statement on Euthanasia Health Care Directive Document from the California Catholic Conference National Catholic Register News Article on Oct....

Guest Blog: Anna C. Howard, JD, on Estate Planning

Link to PDF by A.C. Howard Law with the content below: Top Ten FAQs Estate Planning. 1. What Happens if I Die without a Will? In California, half or one-third of the property you had before or after marriage is passed to the surviving spouse, the remainder to your children in equal portions. All property received during marriage (except inheritance and gifts) goes automatically to your spouse. If not to a spouse or children, to parents, then siblings, then grandparents, then aunts and uncles via laws of “intestate succession.” Note, if you have children who are minors the surviving parent may have to report, annually, to the Probate Court to account for how their children’s inheritance money is spent, and set up a bond to guarantee proper handling of all funds. 2. What is an Estate Plan? Everything you own or have a financial stake in, at the time of your death, is your estate. An estate is a separate income-tax paying entity, and must file and pay income taxes to both the State of California and the United States. Creating an “estate plan” helps you pass on your wealth in the most efficient manner possible, and explains how your estate should be handled if you become ill during your lifetime. 3. What Goes into a Typical Estate Plan? (a) one will; (b) an advance directive regarding lifesupport and other health care decisions, which is more thorough than a “living will” because it addresses terminal illness; and (c) two durable powers of attorney, one for making health care decisions on your behalf, the other for making financial and business decisions....