The New American Dream

The New American Dream: Is Your Financial Plan Built for What Comes Next?

I recently had the opportunity to present aboard the Crystal Serenity at the MoneyShow on a topic that I believe is going to become increasingly important for investors and families over the next decade:

The New American Dream: AI, Technology & the Coming Age of Abundance.

The title may sound like something out of a science-fiction movie, but that was actually the point.

The technology we watched growing up—computers that could talk, robots working alongside people, and software capable of doing increasingly sophisticated work—is no longer science fiction. It is becoming part of everyday life.

The interesting part isn’t simply what artificial intelligence can do.

The interesting part is what happens to the wealth you’ve already built when the economy around you changes dramatically.

From Scarcity to Abundance

For decades, our economy was largely built around scarcity.

Labor was scarce. Information was scarce. Capital was expensive. Productivity grew relatively slowly.

Technology is changing that equation.

Machine intelligence can now scale across millions of people at a rapidly declining cost. Businesses can automate tasks, analyze information faster, and potentially produce more with fewer resources.

But that doesn’t mean everything suddenly becomes easy.

Energy, physical infrastructure, capital and—perhaps most importantly—trust are still scarce resources.

And whenever the economy changes, wealth tends to move.

That creates both opportunity and risk.

The Investment Question Isn’t Just “What’s the Next AI Stock?”

One of the biggest takeaways from the presentation was that investors shouldn’t think about technological change in terms of simply finding the next hot stock.

There are multiple layers to every major technological transformation.

There are the companies building the technology.

Then there are the companies providing the electricity, data centers, cooling systems, networks and cybersecurity required to support it.

Then there are businesses using the technology to improve their margins and productivity.

And finally, there are companies whose existing business models may be disrupted.

The question becomes:

Where does the economic value ultimately accrue?

But there’s another important question for investors:

What happens if you’re right about the technology but wrong about the price you pay for it?

A great company can still be a bad investment if expectations become too high.

That is why investment management isn’t simply about identifying good companies. It is about understanding valuation, concentration, risk and how an investment fits into the rest of your financial life.

Your Biggest Risk May Not Be Your Investment Portfolio

This becomes especially important for successful investors.

If you’ve accumulated significant wealth, your financial life probably extends far beyond a brokerage account.

You may own a business.

You may have real estate.

You may have concentrated stock positions.

You may have retirement accounts, private investments or other assets.

And your family’s financial future may depend on all of them working together.

The risk is that several seemingly different assets may actually be exposed to the same underlying economic factor.

Add taxes, liquidity needs, family commitments and changes in the labor market, and your financial picture can become much more complicated.

That’s why I believe the question isn’t simply:

“What should I invest in?”

It is:

“Does my entire financial plan hold together if the world changes?”

Participate. Protect. Transfer.

My philosophy coming out of this presentation can be boiled down to three words:

Participate.

You don’t want to sit on the sidelines while innovation changes the economy.

Owning productive assets and participating in economic growth can be an important part of long-term wealth creation.

But participation needs discipline.

Protect.

The goal of financial planning isn’t to eliminate risk. That’s impossible.

The goal is to understand how much risk you can actually afford to take.

That means diversification, liquidity, appropriate position sizing, tax planning and preparing for the possibility of significant market declines.

The question I often ask is:

If the market falls while your business or family suddenly needs cash, what decisions would you be forced to make?

That’s where risk management becomes real.

Transfer.

Ultimately, wealth isn’t just about accumulating more.

It’s about what that wealth accomplishes for your family.

More than $100 trillion is projected to transfer to heirs over the coming decades. That means the next generation will inherit not only financial assets, but also businesses, real estate, investment accounts and the responsibility that comes with them.

A successful wealth transfer requires more than simply naming beneficiaries.

It requires preparing the next generation to earn, own, protect, give and make decisions.

Tax Planning Is Investment Management

One of the other major themes from the presentation was the importance of looking at investments through a tax and estate-planning lens.

A portfolio decision can create a tax consequence.

A charitable decision can create a tax consequence.

Selling an appreciated investment can create a tax consequence.

Giving an asset to the next generation can create a tax consequence.

That’s why I believe financial planning, investment management, tax planning and estate planning should not exist in separate silos.

The best financial decision isn’t always the one that makes the most money before taxes.

It may be the one that allows your family to keep more of what you’ve built after taxes.

What Does This Mean for Your Financial Plan?

Technology may change the economy.

Markets will change.

Interest rates will change.

Businesses will change.

Jobs will change.

But your financial plan should be designed to adapt with them.

That’s why at Lloyd Financial Group, we look at the entire picture—not simply an investment account.

We want to understand your investments, cash flow, taxes, risk, goals, family and eventually the transfer of your wealth.

We recently introduced the LFG Sleep-at-Night Risk Assessment™ around this very concept.

Because your risk isn’t simply a number on a questionnaire.

Your real risk depends on your capacity to absorb losses, your comfort with volatility, what your wealth needs to accomplish and when you’ll need the money.

The future will undoubtedly look different from the past.

The question is whether your financial plan is built for that future.

Participate. Protect. Transfer.

And most importantly, Dream Bigger. Sleep Better.

Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Disclosures/Regulation:

This content is intended to provide general information about Lloyd Financial. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain an understanding of our investment philosophy, our strategies and to be able to contact us for further information.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

Past performance is no guarantee of future returns.

Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable

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