One of the founding principles at Traust Sollus is not to merely make people money but to explain and educate them on how we’re doing it. After all, it is their money, and they should be aware of the process behind their financial plans. Every day, we meet many highly successful individuals—executives, entrepreneurs, business owners, physicians, and professionals—and these people are very bright. Most are in their mid-forties to mid-fifties; have become masters of their businesses, careers, and professions; and are often among the very best at what they do. But that doesn’t mean they are masters in every aspect of their life: what they normally have not mastered is their cash flow. As I have said before, time and time again, clients who are very successful in life come to meet with us and say, “I visit my accountant at the end of the year to do my tax return. They tell me how much I’ve earned and how much I owe, and I think to myself, I made all that money? What did I do with it?

But that’s why they’re here. These people are unaware of how to control and become masters of their cash flow. Yet through the Integrated Cash Flow Management Approach℠, it is possible to make them masters of their money. The model and our advice gives them control of their cash flow so that they can preserve their wealth or build additional wealth to do the things in life they want, now or in the future. And it’s not always the answer you think it is going to be.

I have one client who was a senior executive of a Fortune 200 company. He was about sixty years old and had done very well, so he figured he could retire and notified his company that in six months, he was going to leave. He didn’t want to retire with debt, so he took money out of his savings to pay off their mortgages of his homes. Contrary to popular belief though, debt isn’t always a bad thing. I had to tell this client that, “I have some good news and bad news for you. The bad news is that you don’t have enough assets to generate the cash flow you need to live the way you want now and for the rest of your life.” He looked at me, shocked.

But the good news was the solution was easier than expected. He could just take out those mortgages again, which would generate the needed cash flow from his investments, so he’d have more tax sheltering from the interest deduction giving you even more free cash flow, and he’d be able to live the way you wish now and in the future.

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