THE TAX ADVISOR- Helping Clients Avoid Work
From the June 2004 Issue of Investment Advisor Magazine
A million bucks just ain't what it used to be. There was a time when prevailing wisdom in this country said that if you amassed enough wealth to be called a millionaire, you and your descendants were set for life and never had to worry about working again. Then the paradigm shifted and a million dollars became the goal for a sufficient retirement nest egg. Now it seems that an increasing number of people who have retired as millionaires find that amount doesn't allow them to maintain the lifestyles they expect and want. At least that's what Jim Trippon, a Houston-based CPA and investment advisor, has discovered.
After beginning his career as a Price Waterhouse CPA, Trippon began his own practice and currently operates both a CPA firm and a Raymond James branch where he caters to retirees and the soon-to-be retired. He refers to the niche he serves as the "mass affluent," which he defines as those with investment assets in the $1 million to $10 million range, noting that they make up 85% of all American millionaires.
"In my dealings with high-net-worth individuals, I noticed that a high percentage of people who retired as millionaires had been forced to go back to work," Trippon says. "Twenty-one percent of people who had retired with a net of $1 million had to go back to work within five years. That really intrigued me, so I did a three-year research project to determine the primary causes for someone going back to work after retiring."
That research became the basis for a recently published book, How Millionaires Stay Rich Forever (2004, Bretton Woods Press), and a Web site, www.stayrichforever.com, in which Trippon attempts to pass on some of his empirical knowledge of how those who have become millionaires can stay that way. He also includes strategies for those who aspire to millionaire status.
In order to help his readers generate a lifetime of wealth and be able to pass that wealth on to subsequent generations, Trippon identifies what he calls "The Four Pillars." These pillars represent the abilities to:
• Create and grow wealth
• Protect and preserve wealth
• Receive income in tax-efficient ways
• Protect wealth in times of disability and after death.
"One of the things I discovered in my research was the importance of working with an investment advisor," he notes. "The statistics proved that people who did work with an advisor had a substantially higher likelihood of not going back to work. I knew that intuitively, but it was a good point to validate."
