How to Thrive Financially Without Missing Out on Life’s Mid-Life Joys

Life should be a delicate balance between planning for the future and enjoying the present. However, depending on your generation (more on that below), it’s not uncommon for some people to think that thriving financially means sacrificing today’s joys for tomorrow’s security. 

At Cogent Strategic Wealth, we believe you can have it both ways. We specialize in helping high-achieving professionals and entrepreneurs who want to outsource their wealth’s day-to-day planning and investing to a team of highly qualified financial advisors. With decades of financial advisory experience, we offer sophisticated wealth management solutions tailored to our clients’ unique needs. 

This blog will look at ways to thrive financially without missing out on life’s current pleasures.

A Look at How Various Generations Approach Wealth Management

It’s interesting to see how various generations balance saving, protecting wealth, and enjoying life. Understanding these competing perspectives helps our team of Chicago financial advisors tailor our advice and services to meet their diverse range of needs. 

Baby Boomers (Born 1946-1964) 

• Focus on a secure retirement while maintaining a comfortable lifestyle
• They value stability and often prefer more conservative investments
• Tend to prioritize healthcare and long-term care planning
• Are interested in estate planning to ensure a smooth transfer of wealth to their heirs
• Are very conscious of taxes on inheritance, especially in states like Illinois

Generation X (Born 1965-1980)

• Balancing career growth with raising children and caring for aging parents
• Emphasize saving for college educations and retirement at the same time
• Want to achieve financial independence earlier to enjoy more retirement years
• Open to diversified investments and real estate to build additional wealth
• Value work-life balance and experiences over material possessions
• Willing to spend on travel and other one-in-a-lifetime experiences while building a solid financial foundation

Millennials (Born 1981-1996)

• Place high value on experiences like travel and social experiences
• Often prioritize spending on experiences over traditional savings
• Use technology and apps for budgeting, investing, and managing finances
• Interested in sustainable and socially responsible investments
• Focus on achieving financial freedom but value flexibility and gig economy opportunities
• Concerned about student loans and housing affordability while planning for retirement

Generation Z (Born 1997-2012)

• More financially literate than previous generations at their age, thanks to online resources
• Interested in learning about investing and building wealth earlier than previous generations
• Tend to save money but also enjoy spending on technology, fashion, and life’s experiences
• Value financial security but want to live more in the moment
• Skeptical of traditional financial systems and more open to cryptocurrencies and new investment platforms
• Prefer fee-only financial advisors and fiduciaries for unbiased advice

Embrace a Holistic Financial Plan

The foundation of any wealth management strategy starts with a comprehensive, holistic financial plan. This plan allows you to set realistic and achievable short-, intermediate, and long-term financial goals. Think of your plan as a roadmap that helps you reach your final destination. 

In the landscape of financial planning, Generation X presents a unique profile: they’re at a pivotal stage where career growth, family responsibilities, and future planning intersect dramatically. We find ourselves having been challenged by walking this path ourselves as leaders of Cogent and our families. Balancing the demands of raising children and caring for aging parents while also investing in their children’s education and own retirement, Gen X’ers are not just planning for tomorrow—we’re safeguarding our legacy. As Gen X’er ourselves, the quest for balance resonates deeply. 

Our approach at Cogent Strategic Wealth transcends mere financial management; we strive to craft strategies that honor both the immediate needs and long-term aspirations of our clients. From diversifying investments to planning memorable family experiences, we ensure that life is not just lived but savored. This dual focus on building solid financial foundations while enjoying the benefits of success—be it through fast cars or serene second homes—reflects the quintessential Gen X pursuit of a life well-lived.

At Cogent Strategic Wealth, our Design | Build | Protect wealth management process is crafted just for us. It supports your financial goals while allowing you to enjoy your life. Here’s how it works.

Design: We begin by understanding your unique financial situation and aspirations. This includes everything from retirement savings, funding your children’s education, and planning for your estate. We also consider specific concerns, such as estate and inheritance taxes, if they relate to your situation.

Build: Once we have a clear picture, we construct a personalized plan that aligns with your current circumstances, timelines, and financial goals.

Protect: We implement strategies to protect and grow your wealth, ensuring your assets are always managed in your best interests.

Tax Planning Matters 

There’s nothing worse than meeting with your CPA at the beginning of each year to find out that you have much more taxes due than you were planning to pay from the year prior. This is why tax planning should be an integral part of your wealth management strategy. Taxes are a major expense that should be minimized whenever possible.

By understanding and utilizing deductions, credits, and other tax benefits, you can reduce your taxable income and retain more of your assets for your use. This means more money in your pocket to spend on the things you love, like family vacations, a second home, and a membership at your local country club.

Choosing the right accounts, such as IRAs or 401(k)s, and making smart decisions about when to buy or sell investments can minimize taxes and maximize your returns. This allows you to grow your wealth without the burden of unnecessary taxes, giving you the flexibility to enjoy life now and in the future.

Cogent has always put effective tax planning at the heart of our wealth management experience. And for good reason. Taxes, if not thought about strategically, can be one of the quickest ways to erode the gains from an otherwise solid financial plan. Effective tax planning is one of the most important ways to increase the chances of meeting your broader life goals, as taxes touch almost every element of wealth management — from investment strategies to planning for your retirement and legacy.

A high-achieving family that invests with income and estate tax efficiency in mind can achieve substantially higher wealth levels than a family oblivious to taxes. More importantly, we have witnessed in our clients and our own financial lives that there is a significant value in integrating income tax efficiency and estate tax planning. We believe strongly that becoming efficient with respect to tax should make affluent families even more eager to become efficient with respect to their tax profile.

If leaving a financial legacy for your family is important to you, tax planning becomes a strategic service. Effective estate planning can minimize the taxes your heirs will pay, allowing more wealth to be passed on. This ensures your loved ones are taken care of, and they can continue to enjoy life’s joys even after you’re gone.

If philanthropy is part of your life, tax planning can enhance your charitable giving. By understanding the tax implications of your donations, you can give more effectively and potentially increase the amount you can afford to donate. This means you can support the causes you care about without compromising your financial well-being or your heirs.

Watch our founder, Michael Evans, talk about three ways to make paying your taxes less taxing.

Protect Your Wealth

Protecting your wealth is as important as building it. At Cogent Strategic Wealth, our Design-Build-Protect process emphasizes safeguarding your assets. Here are some strategies to thrive financially while protecting your hard-earned wealth:

• Estate Planning: Ensure your estate is structured to minimize taxes and facilitate a smooth transfer of assets to your heirs. Understanding estate taxes in Illinois is crucial if you plan to spend your final years here.

• Insurance: Adequate insurance coverage can protect you from unforeseen events that could derail your financial plans.

• Legal Protections: Work with a fiduciary in Chicago to set up trusts, family corporations, and other legal structures that provide additional security for your estate.

At the End of the Day, Be Sure to Enjoy the Present

Thriving financially isn’t just about preparing for the future; it’s also about enjoying the present. Here are some ways to balance both:

• Understanding your spending habits is key to thriving financially. Living within your means doesn’t mean cutting out all the fun; it’s about making mindful choices.

• Allocate a portion of your budget for fun activities and experiences. This could be travel, hobbies, or other activities.

• Practice mindfulness and be present in the moment. Enjoy the simple pleasures of life without worrying constantly about financial matters.

• Celebrate your milestones: Acknowledge and celebrate your financial achievements, no matter how big or small. This positive reinforcement can motivate you to stick to your plan.

Ready to learn more about our unique Design | Build | Protect process focused on your financial best interests? Connect with us.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Cogent Strategic Wealth provides investment advice only through individualized interactions. Certain information is based upon third-party data, which may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. © 2024, Cogent Strategic Wealth®