I am so excited to share with you our Borrow Smart™ Scenario Desk and let you know that we are here to help you manage the Liability side of your client’s balance sheet. I created this part of my company many years ago due to feedback I received from Financial Advisors who needed help and did not have the time to tackle this task.
Intent: The Scenario Desk is here to help you save time and evaluate the liability side of the client’s balance sheet. How we help is by analyzing each liability the client has and quantifying the cost of that debt. Back in Business school many years ago, this was called the Weighted Average Cost of Capital for a business and I have brought that concept to an individual’s balance sheet.
The Financial Advisors I work with leverage this free service often when they onboard a new client. The FA will fill out my intake form and email it over to me or just connect me with the client so my team can input the data and create the Borrow Smart™ evaluation.
Here is a snapshot of a couple of pages of the Deliverable:
Again, the goal here is to help the client get clarity on what their debts are truly costing them so they can understand that the highest and best use of their free cash flow is not paying off a low cost debt faster than required but investing this money to create true financial freedom.
This is the heart of Liability Management – The incorporation of Mortgage, Taxes, Leverage, Diversification, Products, Payment, Availability, Amount, Management, Protection and Discipline into a practice of advising and managing my clients borrowing over time. This is what I wrote about in my book, “Borrow Smart, Repay Smart” and I bring this into action each day. Liability Management involves the analysis of the client’s liabilities and then solving for unique borrowing strategies, tax ramifications of buying, selling and refinancing residential real estate for primary use, investment purposes and utilizing 1031 exchanges and stay in alignment with their financial goals.
The asset and liability side of our client’s balance sheet are linked very closely together. Making decisions in isolation without regard to the other side of the balance sheet can lead to unintended consequences. Most of our clients live in a cash flow world where borrowing is done smartly can lead to much great wealth over time.
About The Author: Dan Williams
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