Apply My 7-Point Checkup to Your Nest Egg
Adrian Mastracci, Fiduciary Portfolio Manager at Lycos Asset Management
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We keep regular tabs on many factors throughout our lifetime. I submit that a best practice is to apply the same principle to the family nest egg. Whether it is a starting portfolio or retirement fund. Therefore, I recommend a nest egg checkup.
A new year often prompts investors to consider making changes to the nest egg. Hopefully, well thought out changes that improve your desired outcomes.
“I recommend applying a few methodical steps that assess your nest egg. A simple check of the family finances provides you lasting value.”
—Adrian Mastracci
I’ve designed a simple checkup tool and I invite you to adopt it. If you want to manage family wealth successfully, you should be conversant with each point. I suggest making it high priority.
The 7-point tool is a small bundle of steps that assesses your precious nest egg. A big picture check of family wealth typically delivers simplicity alongside value.
However, it’s easy to get swamped. Too many investors latch onto walls of worry that cloud decisions. Fears of low returns, rising health care and running short of money come to mind.
My checkup tool helps seal the cracks found in a wide variety of financial foundations. Probably more so for investors who make high demands on the nest egg.
Vital Issues
You need to first identify the cracks, as opposed to the minutia. Then initiate swift, corrective actions for the long run. The resulting analysis is a simple grouping of your “Yes/No” answers.
Let’s probe your portfolio on these vital issues:
| Vital Portfolio Issues | Your Replies |
|---|---|
| 1. Are your goals achievable with the current action plan? | Yes: ___ No: ___ |
| 2. Are you saving enough to reach the retirement targets? | Yes: ___ No: ___ |
| 3. Are your retirement assumptions realistic for today? | Yes: ___ No: ___ |
| 4. Are you investing within a comfortable asset mix? | Yes: ___ No: ___ |
| 5. Are you aware how the advisor is paid? | Yes: ___ No: ___ |
| 6. Are you happy with the direction of the portfolio? | Yes: ___ No: ___ |
| 7. Are you receiving objective and unbiased advice? | Yes: ___ No: ___ |
A fitting portfolio starts at five “Yes” replies. Now to assess your portfolio health:
| Number of “Yes” Replies | Your Portfolio Health |
|---|---|
| 6 to 7 | Robust nest egg |
| 4 to 5 | Needs some tweaks |
| 2 to 3 | Urgent attention required |
| 0 to 1 | Design a new action plan |
Apply my concise suite of nest egg checks to establish a sense of your direction. They are also early warnings that highlight portfolio weakness.
Any one of the issues can impact your family’s progress. For some, two or more “No” replies can inflict undesirable outcomes.
These remedies provide you added values:
- Make certain your game plan is logical and sensible.
- Revisit your asset mix targets every three to five years.
- Prune some investments if you own too many.
- Reduce excess complexity in your nest egg.
Ensure that your family nest egg delivers on expectations. Actions that turn “No” into “Yes” replies improve your portfolio pillars.
One superb habit is to reapply this tool, say every year or two. Historical trails you create are useful comparisons over the long term. The process takes little time.
I’ve made this 7-point tool an integral part of my management toolbox. Perhaps it will also begin to make a difference to your long term planning.
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