Success Stories
Case 1:
Young Wealth Accumulators
Background
A couple in their early 40s, both physicians, reside in a high-cost-of-living region. They are raising three children and enjoy a total annual income of $600,000.
Challenges
- They feel like they’re working hard but aren’t being able to save in their retirement accounts.
- They work with an accountant but their tax liability is high and they’re unsure if they are doing everything possible to control it.
- Life is stressful and they want to see if the mother can reduce her work hours without too much of a financial impact.
- Investing and the world of finance is confusing. They try to understand it by doing their own research but they don’t have the time or background for it.
Goals
- Achieve financial independence.
- Buy a home within the next 5 years.
- Retire comfortably by age 65 and travel the world.
- Send their children to a 4-year public college.
Our Approach
- Created a detailed budget to track their income, expenses, and savings. Allocated a significant portion of their income to savings and investments.
- Maintained an emergency fund equal to at least six months of living expenses.
- Assessed their cash-flow needs to support their monthly lifestyle expenses.
- Developed a well-structured asset allocation model.
- Optimized investments and financial decisions for tax efficiency, utilizing tax-advantaged accounts like 401(k)s and IRAs to minimize their tax burden.
- Created a financial plan that encompasses their entire financial situation, including investments, tax planning and retirement planning.
Case 2:
Approaching Retirement
Background
A couple in their late 50’s possessing over $6 million in investable assets approached us with an extensive portfolio consisting of non-halal investments. These assets, amassed over the course of their extensive careers, were spread across numerous accounts within various investment institutions. As they neared retirement, their aim was to streamline their portfolio, diversify into halal investment options, and create a well-defined financial plan for the benefit of their family’s future.
Challenges
- Their holdings encompassed individual stocks, ETFs, and mutual funds, distributed across a substantial number of investment accounts held at various investment firms.
- A significant amount of cash remained uninvested, without immediate short-term requirements.
- Their investment strategy lacked coordination and a means to effectively assess performance.
- Tax-efficiency had received little attention, and a considerable portion of their portfolio consisted of individual equities with no active monitoring.
- They were concerned about adhering to halal investment principles and seeking assurance that their investments are in compliance with these guidelines.
- They are paying a significant amount of taxes each year due to his high income. They are interested in exploring tax-efficient investment strategies that can help reduce his tax burden.
- They have philanthropic inclination and wish to find an efficient way to contribute to charitable causes.
- No estate plans. They want to ensure that their wealth distribution aligns with both their specific needs and Islamic inheritance principles.
Goals
- Retire in 5 years
- Establish a clear plan that respects the principles of Islamic inheritance while fulfilling their unique wishes for wealth distribution.
- Create a halal investment portfolio, diversify asset exposure, and formulate a holistic financial plan.
- Create a planned charitable giving strategy as a legacy
Our Approach
- Consolidated their holdings from various investment accounts into a more centralized and manageable portfolio. Ensure that their investment strategies align with Islamic guidelines.
- Assessed their investment portfolio and diversified into halal investment options to spread risk and potentially enhance returns.
- Implemented tax-efficient investment strategies and retirement accounts to reduce their annual tax burden.
- Developed a structured charitable giving plan that aligns with their philanthropic values.
- Developed a bucket strategy, dividing retirement into different time increments that allow them to choose investments that deliver specified outcomes at specified times.
- Created a holistic financial plan that encompasses their entire financial situation, including investments, estate planning, retirement, and charitable goals.
- Engage with a qualified estate planning attorney to establish an estate plan that respects Islamic inheritance principles while fulfilling their specific wealth distribution wishes.
Case 3:
Physician 50 Years Accumulation Phase
Background
An experienced physician with a well-established medical practice. He has achieved financial success with his business but faces various financial challenges. He’s experiencing very high employee turnover and dissatisfaction from his staff.
Challenges
- Save for his children’s college education, which includes a 10-year and a 15-year plan for his two children, currently aged 10 and 15.
- Maintain a diversified investment portfolio with a moderate risk tolerance, allowing for stable growth with reduced risk, avoiding investments in companies involved in gambling, alcohol, pork, and other prohibited activities.
- Consider estate planning options to ensure the smooth transfer of assets to heirs and to ensure that his assets are distributed in accordance with Islamic inheritance rules.
- Seek tax-efficient strategies to minimize his tax liability.
Goals
- Wants to retire comfortably at age 65, preferably in his home state of Florida where there is no state income tax.
- Create a thriving medical practice, with a retirement benefit plan featuring diversified halal investment options.
- Good quality of life for family and employees
- Peace of mind that heirs will be well taken care of
Our Approach
- Developed a business retirement savings plan that includes contributions to retirement accounts to maximize tax-advantaged savings.
- Calculated the estimated costs of college education for the two children based on the 10-year and 15-year plans.
- Built a diversified portfolio that balances risk and return with a moderate risk tolerance, considering Islamic investment principles, avoiding investments in prohibited activities. Allocated assets across various investment classes, including equities, real estate, and halal fixed income, while avoiding investments in prohibited industries.
- Provided an estate planning draft to facilitate the smooth transfer of assets to heirs. Consult with an attorney experienced in Islamic estate planning to ensure assets are distributed according to Islamic inheritance rules.
