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What is a leverage planner?
A leverage planner is a financial planner who specializes in the nuances of debt management, defensive leverage (such as insurance strategies,) and leveraged effects on growth assets.
Many “old school” financial planners have a very shallow (if any) understanding of the effects of specific leverage relative to taxation and growth. Some are simply fearful. Such planners expose their clients to several levels of unecessary risks, including errors of omission as well as errors of commission.
So, you and your complementary professionals are trying to help people >>> maximize <<< their leverage in their investments.
No… Replace “maximize” with “optimize.” There is an optimum blend of various types of leverage for each prudent individual at different stages of their development… much as internal combustion engines have different optimum mixtures of gasoline and air at different elevations, loads and revolutions.
One size does not fit all (and that includes the avoidance of all.)
That sounds like borrowing as much as possible with as little capital invested as possible in buying a house.
Not at all. Prudent investing often requires weighing the useage of leverage into its strategic advantage.
When buying residential real estate for investment purposes, in most U.S. markets anyway, rarely are the costs of leverage the limiting factor… as much as sufficient reserves are. With sufficient reserves, zero capital commitment is naturally optimum (for the investor, anyway.)
Indeed, investing in residential real estate WITHOUT leverage would mostly be considered fairly (f)oolish in most cases… from not just a loss of opportunity returns, but also from the over-exposure to equity risks and liquidity risks.
This is different than what a mortgage broker or an insurance broker does in what ways?
You do understand the difference between a stockbroker and an investment planner, yes? One pushes products from the provider’s best interest, the other guides clients as a fiduciary from their clients’ best interests.
Same difference, different specialized fields.
And where do you make your money in this process?
AHHH… the “follow the money” questioning process! ;~) We like this as well!
Depending on our client’s preferences to our degree of involvement, we may be paid in one (or combinations) of three methods;
- A) Transactional fees (pre-determined one-time fees upon transaction completion, paid by the client or the wholesaler, and fully transparent in either case.) Most of our client base have ‘baby-stepped’ their way in using this structure.
- Strategy-based results fees (a percentage of the improved net worth over time strictly related to the strategy applied, versus an agreed “baseline” null strategy of no leverage, or standard traditional leverage.)
- Comprehensive Net-Worth Management fees (a client-determined blend of a percentage of growth, or a percentage of maintained total net worth.) The client’s determined blend identifies their sliding scale preference of our focus toward all-out growth (our youngest, most aggressive clients) versus maximum defensive maintenance (our most senior retired clients.)
In short, we are paid according to my clients’ preferences, either on a piecemeal basis, or on a results basis, or a blend. In every case, it is entirely a mutually determined and arrived at schedule, and always 100% on the upfront and fully exposed.
