NEWS Archives - Page 8 of 14 - Centura Wealth Advisory

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How to Elevate Your Advisory: a Guide for Financial Planner and Wealth Advisors

As a financial planner or wealth advisor, you know planning the future of the firm is essential for long-term success.

At Centura Wealth Advisory, we focus our growth across the following five practice area pillars:

Marketing and business development
Financial planning solutions
Life-based estate solutions
Alternative investments
Practice management

In this article, we’ll discuss each of these pillars as well as provide examples of some of our go-to alternative investments.

Marketing and Business Development

How are you leveraging your network of Centers of Influence? Creating opportunities for shared thought leadership through tools like podcasting – such as our Live Life Liberated podcast – or hosting events can prove beneficial through deepening connections, sharing best practices and even increasing referrals.

Financial Planning Solutions

Most financial Advisory firms offer:

Goal based financial planning
Cash flow based financial planning
Needed services after the above is accomplished

How does your firm differentiate your planning offering from the competition? Can you define & articulate your planning process?

Financial advisors can assess their financial planning solutions by asking the following questions about their various process:

Income Tax Planning

What income tax planning strategies do you offer that produce 10-100X+ returns relative to cost?
How do you save your clients 20-80% of their income tax liability?
How are you making clients’ CPAs life easier?
Are you in the driver’s seat of your client’s income tax plan? Or is their CPA?

Wealth Transfer Planning

Are you leading the strategy for your client’s wealth transfer plan? Or is their EPA?

Balance Sheet Optimization

Can you optimize your clients balance sheet to maximize returns, minimize risk and ensure assets are held in optimal account locations for tax purposes?

Investments and Alternative Solutions

At Centura, we understand the power of alternative investments. We look to add exponential value through these alternative investments – such as private equity, private real estate, private credit, hedge funds, cryptocurrency and more.

Chris Osmond, Chief Investment Officer at Centura Wealth Advisory, describes how we approach alternative investments.

https://youtube.com/watch?v=cn8QVK3Dr48%3F%26wmode%3Dopaque%26rel%3D0

Private Credit

Investors may enter private credit investments because of their floating rate loans, which will limit the interest rate risk associated with other forms of investment, such as traditional fixed-income investments.

Additionally, private credit transactions are direct negotiations between the lender and the borrower. This allows investors to access a wide range of private transactions and negotiate terms that best work for their situation.

Life Insurance

Life insurance can be a powerful vehicle for alternative investments. It provides downside protection, high liquidity, and an attractive upside potential relative to investments with a similar risk profile.

Check out episode 31 of our podcast, Live Life Liberated, to learn more about how life insurance solutions can be used as an alternative to fixed-income investments.

Life-Based Estate Solutions

How do you access the best life insurance solution(s) for your clients?

For example, main business lines include:

Cash Management
Income Tax Planning
Wealth Transfer Planning
Business Planning
Death Benefit Planning

Or, advanced Planning concepts, such as:

Split Dollar – Private, Business & GSD
Premium Finance
Charitable Trusts
GRATs, SLATs
IRA Optimization

Check out our retirement checklist, here.

Practice Management

Financial planners and advisors can elevate their advisory through streamlining their systems and processes.

What are Financial Management Processes?

Financial management processes are, in their simplest terms, plans and procedures which will help an individual, family or institution reach their financial goals. These processes can include a series of steps, such as:

Identifying financial goals
Gathering financial and personal information
Analyzing financial information
Developing a customized financial plan to achieve these goals

In order to assess their current solutions, members of a firm can ask questions such as:

How do you Capitalize on your Financial Genius?
How do you build depth in your organization? What is the level of expertise of your #2?
How do you leverage teams in your practice?
What tech stack solution has unlocked revenue and time in your practice?

Learn more in our blog, The Importance of Systems and Processes in Financial Management.

Connect With Centura

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

December 6, 2022

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INVESTING, NEWS

How to Seek Greater Returns in a Risky Environment

In the current risky environment –with inflation and interest rates on the rise– we are often asked by clients, “How do we manage risk? How will these changes impact our portfolios? Why are these changes happening?”

At Centura, we use alternative investments and believe in taking an institutional approach to our asset allocation. In this challenging market, we guide our clients towards alternative investments such as private real estate, private equity and private credit.

Before we discuss why investors are using these alternative investments as a hedge against inflation, let’s take a quick look at why the market is changing and how these changes will impact investors.

What Has Changed in the Market Over the Last Twelve Months and Why?

The short answer: inflation. Let’s review how inflation got to where it is today and how we can navigate this challenging market moving forward.

From 2009-2021: Inflation and Interest Rates were Low

In the past, for instance from 2009 to 2021, investing seemed simple; the Federal Reserve was continually lowering interest rates or adding liquidity into the economy whenever the market became problematic. Inflation remained low. During this period, investors would invest “by the dip,” or, in other words, invest while the market dipped before the Fed would take action to rectify the situation.

Quantitative Easing in 2020

In 2020, the Fed began quantitative easing (QE) to encourage investment and spur economic activity. In this process, the Fed expanded its balance sheet.

In June 2022, however, roughly two years after the quantitative easing plan was announced, the Federal Reserve began quantitative tightening (QT).

The Federal Reserve, Quantitative Tightening and Inflation

The quantitative tightening process includes allowing the Fed allowing purchased bonds to reach maturity and run off its balance sheet, which results in rising interest rates and has the effect of withdrawing liquidity from the economy.

Inflation remains prevalent in the American economy. In fact, in Q2 2022, inflation – now in the 8-9% range –sat at its highest point since 1982.

What Does This Mean For Investors?

It may be time to become actively involved in the management of your portfolio.

How to Seek Greater Returns and Reduce Risk in a Challenging Market

In constructing an optimized portfolio, there are many elements to consider. The goal of an optimized portfolio is to maximize the return while minimizing risk.

How do we accomplish an optimized portfolio at Centura? We utilize alternative investments and an institutional approach to our asset allocation.

For instance, this means we could have a client with an allocation to alternatives at 30-40%.

In this inflationary market, we guide our clients to alternative investments in private real estate, private equity and private credit.

Private Real Estate

Private real estate can serve as a hedge against inflation and be an attractive option for investors for several reasons, including that private real estate maintains intrinsic value and recovers quickly in a challenging market.

Private real estate has produced solid results for decades and while nothing is recession-proof, many investors consider real estate “recession-resistant.”

Multi-family real estate remains a strong option for investors looking for a hedge against inflation. Why? Demand for multi-family real estate continues to increase while supply remains stagnant.

Learn more about how investors are using multi-family real estate as a hedge against inflation.

Private Equity

Private equity investments are deemed “private” because they involve buying shares or an ownership stake in private companies or funds, rather than ones traded publicly on the stock market.

Private equity provides companies with easy access to capital as an alternative to traditional financing options, such as bank loans. For investors, private equity serves as a vast range of opportunities in which to find value and invest.

Private Credit

Private credit can provide several advantages and opportunities in a market with inflation and rising interest rates.

Floating Rate Loans

In a rising rate environment, floating rate loans are a highly attractive opportunity for investors. Why? Income increases alongside rising interest rates.

Private credit is typically a floating rate. This may help to limit both the rate risk and the duration risk that are associated with traditional fixed income.

Privately Negotiated Deals

Private credit transactions are direct negotiations between the lender and the borrower. This allows investors to access a wide range of private transactions and negotiate terms that best work for them.

For example, private credit investors tend to negotiate for better protections to make credits more defensive, such as a senior secured structure, call protection, or covenant terms.

As the Economy Recovers, Credit Quality Improves

Credit quality typically improves with economic recoveries. While investors should seek the assistance of professional private credit managers to prioritize downside protection, extensive due diligence, and quality of credit.

Structured Notes

Structured notes, written by high credited banks, are customizable and well-suited for a rising interest rate environment and can help investors maintain returns. For more detail, listen in to Episode 35 of Live Life Liberated, “Structured Notes Simplified with Robert Sowinski.”

Tune into the Live Life Liberated Podcast to Learn More

In Episode 61 of the Live Life Liberated Podcast, Roby Kotcamp, Senior Wealth Advisor, and Chris Osmond, Chief Investment Officer, discuss Centura Wealth Advisory’s approach to risk management. They also explore strategies to achieve greater risk-adjusted returns.

Roby and Chris discuss:

A brief overview of the Fed’s recent actions — and their market implications
Why cash flow is more important than the rate of return
How private real estate, private equity, and private credit can be a useful addition to your portfolio
The benefits of structured notes in risk management
And more

Interested in Learning More About How to Invest in Rising Interest Rate Environments?

At Centura, we are dedicated to our role as stewards in leading our clients to purposeful financial planning and investing strategies to ensure their success. One of our goals is to help our clients navigate and understand challenging economic changes, such as the current rising interest rate environment.

Read our article for more information here.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

November 18, 2022

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INVESTING, NEWS

How Does Real Estate Fit into Your Financial Plan?

For many, real estate investing plays a significant role in achieving personal financial goals—and can be a crucial component of one’s long-term financial strategies. This considered, real estate is likely a factor you’ve considered when developing your financial plan.

So, how might real estate fit into your financial plan? Let’s discuss.

How Can Real Estate Be a Form of Financial Investment?

Real estate can include both residential and commercial property, including homes, offices, retail, parking lots, apartments, warehouses, multi-family homes, and more.

While owning your own home may be part of your financial plan, it is not necessarily an investment. Why? Primary residences are assets and their value can have a significant impact on retirement or estate plans.

However, real estate investments are defined by their ability to produce passive income for their owners. Some common examples of this real estate income include rental properties or earnings made from investment portfolios.

The Most Important Factors for Real Estate Investing

When looking into real estate, investors may start with questions such as: “What should I look for?” Here’s a shorthand list of factors to consider.

Property Location

“Location, location, location” remains the most important factor for profitability in real estate investing. For example, proximity to the following can affect the value of a property:

Market Retails
Warehouses
Transport hubs
Freeways
Tax-exempt areas
Amenities
Green space, and
Scenic areas

Property Valuation

According to Investopedia, property valuation is “important for financing during the purchase, listing price, investment analysis, insurance, and taxation—they all depend on real estate valuation.”

Expected Cash Flows and Profit Opportunities

Cash flow refers to how much money is left after expenses. With this in mind, positive cash flow is essential to a good rate of return on an investment property.

Investors can look for:

“Expected cash flow from rental income (inflation favors landlords for rental income)
“Expected increase in intrinsic value due to long-term price appreciation
“Benefits of depreciation (and available tax benefits)
“Cost-benefit analysis of renovation before sale to get a better price
“Cost-benefit analysis of mortgaged loans vs. value appreciation”

Active vs Passive Real Estate Investments

Real estate investments can serve as both passive and active investments. Let’s review the difference between these two forms of investment.

Active Real Estate Investments

An active real estate investment is one where an individual or group of individuals comes together to purchase a property directly. The investor is “actively” involved in the process of finding, purchasing, and managing the property.

Passive Real Estate Investments

In a passive real estate investment, an investor receives periodic distributions, but otherwise has no involvement in the day-to-day operations of the property. Passive real estate investments are an excellent option for investors who are looking for passive income.

For more information on passive real estate investing, here.

Why Should You Invest in Real Estate? What Are the Benefits of Investing in Real Estate?

With the right assets, real estate investors can:

Diversify their portfolios
Leverage their properties to build wealth
Create stable income streams, and
Enjoy tax benefits

Additionally, real estate can appreciate with inflation long-term.

According to Forbes, “real estate investments have the characteristic of performing well in a rising rate environment. In particular, income-generating real property and multifamily have historically… Shown a greater ability to grow net income during expansionary periods than securities and other assets.”

Let’s take a look at some other benefits of investing in real estate.

Real Estate Investments Can Diversify Your Portfolio

Real estate investments are known to help increase a portfolio’s overall returns while reducing risk.

Real Estate Investments Can Provide a Stable Income Stream

A key benefit of real estate investing is its ability to generate passive income. For instance, investors who play their cards right can create a steady revenue from rental income while building equity through making improvements to the property.

Real Estate Investments Can Provide Tax Benefits

Tax benefits depend upon the type of real estate investment. For example, rental properties can include the deductions of:

Mortgage interest payments
Property taxes
Ongoing property maintenance
Property insurance, and
Independent contractors

Real Estate Can Serve as a Hedge Against Inflation

Real estate can provide opportunities for investors to protect themselves against their declining purchasing power.

Real estate can serve as a hedge against inflation and be an attractive option for investors for several reasons, including that real estate:

Has intrinsic value
Recovers quickly, and
Demand for real estate is rising, while supply is not

Read on to learn how to use multifamily real estate as a hedge against inflation.

Tune Into Our Podcast to Learn More

In Episode 57, Chris Osmond speaks with Paul Kaseburg, Chief Investment Officer of MG Properties, about investment opportunities in the multifamily real estate market and how they help you cope with rising inflation rates.

They discuss:

How real estate, in general, responds to inflationary pressures
The advantages of multifamily over other types of real estate investments
Latest trends in cap rates and cost of debt that real estate investors should know about, and
How inflation is impacting the affordability gap between single-family homes and apartment renting

Give it a listen!

What Else Can Fit Into Your Financial Plan?

At Centura Wealth Advisory, we are dedicated as fiduciaries to our clients’ stewardship of their assets.

One of our goals is to help our clients navigate and understand challenging economic changes, such as the current rising interest rate environment and inflation.

Review our article “How to Plan and Invest in a Rising Interest Rate Environment” for more information, then get in touch with us today.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

November 11, 2022

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CHARITABLE GIVING, INVESTING, NEWS, TAX PLANNING

Tax Deductible Donations: Rules of Giving to Charity

Donating to charity carries many benefits for taxpayers, such as allowing people to connect with a personal cause and preserve legacy–and it doesn’t hurt that donating to charity can lower your tax bill.

If donating to a charity is part of your tax plan, here are a couple of tips so you can maximize your tax-deductible donation before year-end.

What Qualifies as a Tax Deductible Donation?

Tax deductible donations are contributions of money or goods to a tax-exempt organization such as a charity. The IRS states “Contributions must be made to qualified organizations to be deductible.”

However, donations do not have to be money. In fact, the following donations are eligible for deductions:

Cars
Clothing
Stocks or mutual funds, at the fair market value
Collections of valuable items
Artwork
Jewelry
Securities
Real estate

If the value of what you donate exceeds $250, you need to obtain and file a written acknowledgement from the qualified organization you donated to.

If the value of your non-cash charitable contributions is $500 or more, you’ll need to include specific information about the charitable organization and what was donated when you file your tax return.

What Does Not Qualify as a Tax Deductible Donation?

Taxpayers can maximize potential tax savings by knowing what they can and cannot claim. Let’s take a look at some situations that do not qualify as a deductible donation.

Gifts to a Non-qualified Charity or Nonprofit

Many taxpayers assume that any charity or nonprofit organization is qualified. However, this is not always the case. Each group must register with the IRS for the section of the law that applies to it. According to TurboTax:

Religious and charitable organizations typically fall under section 501(c)(3) and can receive tax-deductible donations.
Not every section allows these deductions. For instance, social welfare and civic organizations registered under section 501(c)(4) don’t qualify.
However, two types of 501(c)(4) organizations—veterans’ organizations with 90% war vet membership and volunteer fire departments—do qualify for charitable deductions.

If you are unsure whether an organization qualifies, try this IRS search tool. We still recommend asking the organization about their qualifications before making a contribution.

A Promise or Pledge to Pay

Pledges can’t be dedicated until the money is actually paid.

For instance, if you agree to donate $50 a month for a year to a qualified charity, you can only claim the donations you made within the tax year, not the whole $600.

A Gift That’s Not a Gift

Many organizations use different methods to earn money. However, fundraising tickets are not deductible. For example, bingo games, raffle tickets or lottery-based drawings are not deductible contributions.

Some Community Drives

Another common misconception relates to community drives aimed at helping an individual or family with issues such as: medical costs, loss of a house from fire or funeral expenses.

Make sure that the cause is sponsored by a 501(c)(3) organization such as the Salvation Army or Red Cross so your financial assistance is deductible.

Political Organizations

The IRS is very clear that money contributed to a politician or political party can’t be deducted from your taxes.

How Much Do You Need to Donate to a Charity to Get a Tax Deduction?

There is no minimum donation amount necessary to earn a tax dedication. In fact, even if you do not itemize your deductions, qualified cash donations up to $300 can be deducted (or $600 if you are filing married jointly). Why? The IRS wants to encourage taxpayers to give money to charity.

However, the safe choice is to always itemize your donations. We recommend getting a receipt for any donations to avoid the danger of having them disallowed in case of an audit.

Is There a Limit on Charitable Donations? How Much does the IRS Allow for Charitable Donations?

Typically, the IRS limits donations to either 50 percent of adjusted gross income for public charities or 30 percent of adjusted gross income for private foundations. Let’s take a look at each of these in more detail.

Public Charities

Contributions to charitable organizations may be deducted up to 50 percent of adjusted gross income computed without regard to net operating loss carrybacks.

According to the IRS, the 50 percent limitation applies to

“All public charities (code PC)
“All private operating foundations (code POF)
“Certain private foundations that distribute the contributions they receive to public charities and private operating foundations within 2-1/2 months following the year of receipt, and
“Certain private foundations the contributions to which are pooled in a common fund and the income and corpus of which are paid to public charities.”

Private Foundations

The IRS states “Contributions to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations are limited to 30 percent adjusted gross income (computed without regard to net operating loss carrybacks), however. Tax Exempt Organization Search uses deductibility status codes to indicate these limitations.”

We recommend that taxpayers enlist the assistance of a tax professional or financial advisor before making large contributions to ensure the donations are deductible.

*Contributions must actually be paid in cash or other property before the close of your tax year to be deductible, whether you use the cash or accrual method.

What is a Charitable Lead Annuity Trust (CLAT)?

A charitable lead annuity trust (CLAT) is a charitable trust in which a charity, donor-advised fund, or a foundation that the grantor selects, receives annual payments. These payments may be set for a term of years or the grantor’s lifetime.

At the end of this period, the remaining CLAT assets are distributed amongst the trust’s non-charitable beneficiaries. These beneficiaries are typically the grantor’s descendants or trusts for the descendants’ benefit.

Charitable lead annuity trusts provide a tax efficient way for individuals to transfer wealth to heirs while benefiting charities.

However, CLATs are not exempt from income tax. If the grantor wants to claim the immediate income tax charitable deduction, the CLAT must be set up as a grantor trust, or G-CLAT.

How to Make the Most of Your Charitable Donations

At Centura Wealth Advisory, we know how to optimize charitable giving strategies to best benefit your long-term financial goals.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Read on to learn more about sophisticated gifting strategies for affluent individuals.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

November 2, 2022

Business Signing a Contract Buy - sell house.

EXIT PLANNING, NEWS, TAX PLANNING

Selling Your Business: Navigating Taxes and What to do Next

During the process of selling a business, owners have many obstacles to navigate: processes, taxes, and, of course, deciding what to do next.

In this article, we’ll discuss the different types of taxes a business owner may encounter when selling their business, as well as options for how to invest the proceeds.

How to Navigate Taxes While Selling Your Business

In the process of selling a business, taxes tend to be one of the most significant aspects to consider.

The IRS separates taxable income into two main categories: “ordinary income” and “realized capital gain.”

Capital Gains Tax: What is it and How Does it Work?

In simple terms, a capital gain is a profit gained from an investment. When you sell a business, the capital gain is the difference between the original cost and the sale price.

Taxes on capital gains taxes come into play when you sell the business because capital assets are being sold. Capital gains tax is charged on all capital gains. A net long-term capital gain is usually no higher than 15% for most taxpayers, though there are some exceptions for high earners.

What is Ordinary Income?

Ordinary income includes earned wages, rental income, and interest income on loans, CDs, and bonds (except for municipal bonds). For tax purposes, short-term capital gains are treated as ordinary income on assets held for one year or less.

How does this relate to selling your business? Gains on some of the assets being transferred may have to be taxed at ordinary income tax rates rather than at the 15 percent maximum long-term capital gains tax rate.

Let’s Talk Depreciation Recapture

Depreciation recapture is “the gain realized by the sale of depreciable capital property that must be reported as ordinary income for tax purposes. Depreciation recapture is assessed when the sale price of an asset exceeds the tax basis or adjusted cost basis. The difference between these figures is thus “recaptured” by reporting it as ordinary income.”

What does this mean for business owners? The IRS can collect taxes on any profitable sale of an asset that the taxpayer had used to previously offset taxable income.

What to do After Selling Your Business

Business owners may not be sure where to start when it comes to investing the proceeds of the sale of their company. During this time, business owners may want to utilize the help of professional advisors – such as our team as Centura Wealth Advisory – to take a fresh approach curated to the current conditions of the market as well as the goals of the client.

Let’s review some investment options business owners can consider after selling their business.

Structured Notes

A structured note is “a debt obligation that also contains an embedded derivative component that adjusts the security’s risk-return profile. The return performance of a structured note will track both the underlying debt obligation and the derivative embedded within it.”

Structured notes, written by high credited banks, are customizable and well-suited for a rising interest rate environment and can help investors maintain returns. Due to these benefits, more individuals and families are investing using structured notes.

Listen to an Example: Our Client, Doug Pate

In Episode 62 of the Live Life Liberated podcast, Kyle Malmstrom interviews Doug Pate, a client of Centura Wealth Advisory (Centura), who recently sold his business, International Surf Ventures Inc., after growing it for 17 years.

Doug Pate co-founded ISLE with his best friend, Marc Miller. Doug and Marc share a lifelong passion for the ocean and the sports that surround it. In their first four years of business, they sold surfboards online. At the time, there was no direct-to-consumer surfboard company, and by default, they became the industry’s pioneers. In 2008, they shifted their focus from surfboards to stand-up paddle boards as a way to help more people get on the water across the country.

In this podcast, Doug discusses:

His personal experience of navigating a business exit
How the team at Centura guides him through investing using structured notes
How CLATs helped him save seven figures in taxes and achieve his charitable goals
Why wealth protection is as important as growing your wealth
Centura’s involvement in his wealth management (including alternative investments)
And more

Selling Your Business?

Centura Wealth can help you navigate the process with ease. Learn how to prepare to sell your business here.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

October 21, 2022

EXIT PLANNING, NEWS

Who Am I Missing on My Team to Sell My Business?

As you start thinking about the process of selling your business, compare this process to a game of baseball. Where do all pick-up baseball games start? With picking your team.

So, captain, who’s your first pick?

While captains are typically great players also, they may not have the expertise needed to fill the roster with the best possible team. You’ve built your business to what it is today, and that’s exactly where your expertise lies. So, how would you know how to assemble the correct team to help sell your business?

The short answer: You don’t have to. That’s where the coach comes in.

By coach, we’re referring to your wealth advisor. At Centura, we help facilitate the sale of your business by providing forensic analysis of your current professional roster and recruiting heavy hitters when necessary.

So, what do we look for when recruiting for your business’ sales team?

The Team You Need to Sell Your Business

Although there are various other positions you might need to fill depending on your unique business, here are five non-negotiable team players that can help sell your business.

Accountant/CPA – The Catcher

The right accountant or CPA acts as your catcher because they can help recommend the best course of action through an analysis of your business.

Depending on the complexity of the sale, a CPA who has specific experience structuring a business for the sale can act more as a consultant during the selling process.

What is the Accountant’s Role On the Team?

Your accountant or CPA plays an integral role in the sale of your business. They are involved in the pricing, due diligence, and negotiation process of the sale. The accountant will need to review your records and advise you on the best structure for your business sale while considering one of the biggest challenges in the sale of your business: taxes.

Appraiser – The Shortstop

People say that the secret to building a successful baseball team is to be strong up the middle. Here’s where your shortstop, or appraiser, comes in.

What is the Appraiser’s Role On the Team?

The appraiser’s role on the team is to evaluate your business’ value. Does your business involve intellectual property, proprietary processes, brand awareness, and other assets that can be difficult to put a monetary value on?

If so, it may be helpful to enlist the help of an appraiser. This professional thoroughly understands your business and what other, similar businesses are selling for. Their main goal is to set you up for success with the appraisal.

Attorney – The Umpire

Like an umpire, the attorney ensures the rules are followed; the attorney is responsible for making sure you can walk away without any potential liabilities and with the money you intended to collect.

What is the Attorney’s Role On the Team?

Your attorney plays a key role in preparing to sell your business, including a guiding hand in both:

The due diligence process
And, the negotiation process

Your attorney oversees the entire process and helps make sure your business is compliant throughout the sale.

Business Broker – Long-Relief Pitcher

Your business broker helps call the shots during the sale of your business. They are involved in the pricing, marketing, due diligence, negotiation, and closing process of the sale.

What is the Business Broker’s Role On the Team?

Every decision that is made is run through the business broker to ensure it is best for your business. Business brokers are in it for the long haul and have the stamina to last throughout the entire sales process.

Wealth Advisor – The Coach

Your wealth advisor helps see the game from a high level, making sure your team plays as effectively as possible. Where do you need to fill in the gaps to get a better business valuation? What players do you need to ‘win’ the sale?

What is the Wealth Advisor’s Role On the Team?

If you’ve ever been a part of a sports team, you know that the coach has the ability to make an exponential impact on the game. At Centura, our goal is to do just that; to positively impact your selling experience by understanding what will make you most successful. How exactly do we provide this exponential value to our clients? Read on to understand our process and see how our advisors bring value and expertise to every encounter.

October 13, 2022

Business team meeting to conference, collaboration discussing working analyzing with financial data and marketing business strategy project, presentation and brainstorming to making profit of company

INVESTING, LIBERATED WEALTH, NEWS

Insider Tips From High-Level Financial Advisors

With rising interest rates and inflation reaching a 40-year high, investors, planners and affluent individuals are searching for solutions to create financial strategies to meet their goals.

In this article, we’ll discuss several investment and planning strategies to address some of the most common financial issues faced by affluent individuals: high interest rates, inflation, and high income taxes.

Tips to Navigate a Rising Interest Rate Environment

The primary risks of a rising interest rate environment include the potential for a loss in principal value as well as a loss of buying power. Let’s take a look at some strategies that address and mitigate these risks.

Consider Investing in Private Credit

Investors may enter private credit investments because of their floating rate loans, which will limit the interest rate risk associated with other forms of investment, such as traditional fixed-income investments.

Additionally, private credit transactions are direct negotiations between the lender and the borrower. This allows investors to access a wide range of private transactions and negotiate terms that best work for their situation.

Collateralized Loan Obligations (CLOs)

A collateralized loan obligation (CLO) is “single security backed by a pool of debt….Collateralized loan obligations (CLO) are often backed by corporate loans with low credit ratings or loans taken out by private equity firms to conduct leveraged buyouts.”

With collateralized loan obligations, an investor receives scheduled debt payments from the underlying loans. The investor is offered greater diversity and the potential for higher-than-average returns in exchange for taking on the default risk.

Learn more about using private credit as a hedge against rising interest rates.

Look into Life Insurance

Life insurance can be a powerful vehicle for alternative investments. It provides downside protection, high liquidity, and an attractive upside potential relative to investments with a similar risk profile.

Check out episode 31 of our podcast, Live Life Liberated, to learn more about how life insurance solutions can be used as an alternative to fixed-income investments.

Structured Notes

Structured notes, written by high credited banks, are customizable and well-suited for a rising interest rate environment and can help investors maintain returns.

Tips to Invest Against the Effects of Inflation

Multifamily real estate can provide opportunities for investors to protect themselves against their declining purchasing power.

Consider Multifamily Real Estate as a Hedge Against Inflation

Investors often view multifamily real estate as “inflation resistant.” Why? This form of investment doesn’t typically drop in value as much as other assets during challenging market times. Additionally, multifamily real estate tends to recover faster than other investments.

Further, multifamily real estate is an attractive investment during a market with rising inflation because it:

Has intrinsic value
Provides owners with the ability to adjust rent to combat the effects of inflation
Maintains a rising demand with a stagnant supply

Learn more about why investors are opting for multifamily real estate as a hedge against inflation.

Let’s Talk Short-Term Bonds

Short-term bonds are less sensitive to inflation and the increased rates of a high-interest rate environment than longer-maturity bonds. Longer-maturity bonds may lock in rising rates for longer-time periods whereas shorter-term bonds require a shorter commitment to the high rates and will allow investors to move on to better opportunities.

How to Get Started With These Insider Tips

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients fully transparent reporting, and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

October 8, 2022

Asia stock trader agent or Sale tax loan broker advice brief and point hand to graph report talk to client at office desk show budget chart data or legal result on claim form. Trust will in work plan.

CHARITABLE GIVING, ESTATE PLANNING, NEWS, TAX PLANNING

Sophisticated Charitable Giving Strategies for Affluent Individuals

Affluent individuals and families may choose to implement charitable giving strategies for the wealth of benefits these strategies provide.

These benefits allow a family to connect with a personal cause or preserve their legacy while contributing to an efficient wealth strategy.

Charitable giving strategies can help affluent families and individuals to realize financial benefits as well as reduce current and estate taxes. These charitable giving strategies can include:

Charitable lead annuity trusts (CLATs)
Grantor-charitable annuity trusts, and
Qualified charitable distributions

Let’s discuss each of these strategies and their benefits in detail.

Make a Qualified Charitable Distribution (QCD)

According to Investopedia, a qualified charitable distribution “allows owners of a traditional IRA to exclude RMDs from their adjusted gross income (AGI) if they give the money to approved charities, also known as qualified charitable organizations.”

In simpler terms, the QCD guideline allows individuals to deduct the amount they donate from their IRA. The QCD counts as part of their annual RMD amount, and they must pay the distribution directly from their IRA to the qualified charity.

*Distributions must be made directly to an approved charity and are capped at $100,000 annually per person. Please enlist the assistance of a qualified financial or tax advisor to best navigate the process of making a qualified charitable distribution and earn the associated tax benefits.

Benefits of Making a Qualified Charitable Distribution

This charitable giving strategy can effectively reduce an affluent individual’s adjusted gross income while satisfying their required minimum distribution set by the IRS. Further, this strategy can help offset other taxes, such as social security.

Utilize Charitable Lead Annuity Trusts (CLATs)

A charitable lead annuity trust (CLAT) is a charitable trust in which a charity, donor-advised fund, or a foundation that the grantor selects, receives annual payments. These payments may be set for a term of years or the grantor’s lifetime.

At the end of this period, the remaining CLAT assets are distributed amongst the trust’s non-charitable beneficiaries. These beneficiaries are typically the grantor’s descendants or trusts for the descendants’ benefit.

Benefits of Charitable Lead Annuity Trusts (CLATs)

Charitable lead annuity trusts provide a gift tax efficient way for individuals to transfer wealth to heirs while benefiting charities.

However, CLATs are not exempt from income tax. If the grantor wants to claim the immediate income tax charitable deduction, the CLAT must be set up as a grantor trust, or G-CLAT.

Grantor Charitable Lead Annuity Trusts

In a grantor charitable lead annuity trust (G-CLAT), the trust corpus remaining at the end of the term is given back to the donor instead of the donor’s descendants.

G-CLATs provide a host of advantages, which will improve income tax planning, wealth transfer planning, and charitable planning. Let’s take a look at the benefits of this sophisticated charitable giving strategy.

Income Tax Planning

Individuals participating in the G-CLAT will experience the benefits of both immediate and long-term tax benefits once they’ve successfully implemented this charitable giving strategy.

This will result in an immediate income tax dedication for the individual, which is:

Subject to 20 to 30% of adjusted gross income (AGI) limitation
Able to be utilized over six tax years
Ideally consumed at the highest marginal income tax rates

Wealth Transfer Planning

In addition to the immediate benefits of G-CLATs, these trusts also include wealth transfer tax savings. Through these savings, the taxpayer can experience the benefits of a G-CLAT for years.

Charitable Planning

While the taxpayer does not need to have donative intent, charitable planning benefits G-CLATs if the taxpayer decides to participate.

For instance, as a future benefit, G-CLATs provide satisfying charitable annuity payments with appreciated assets, avoiding recognition of gain on these distributions to 501(c)3s.

How to Get Started With These Charitable Giving Strategies

At Centura Wealth Advisory, we know how to optimize charitable giving strategies to best benefit your long-term financial goals. Our team has successfully implemented over 280 CLAT transactions alone.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

October 2, 2022

Business Consulting meeting working and brainstorming new business project finance investment concept.

INVESTING, NEWS

Five Reasons Why Holistic Planning Is Important

Wealth management combines various financial services to consult and address the needs of affluent individuals.

A holistic approach to financial planning means not aiming for one goal—such as purchasing a property, for example—but addressing a collection of other needs and objectives.

In simple terms, holistic financial planning considers the big picture of an individual’s finances while including both short and long-term goals.

In this article, we will discuss why a holistic approach is important in financial management.

What is Holistic Financial Planning?

Or rather, what isn’t holistic financial planning?

To understand holistic financial planning, it can be helpful to understand what it isn’t. Holistic financial planning does not:

Focus only on investments
Disregard larger tax planning strategy
Sell insurance or annuities without understanding the full scope of a client’s needs
Consider a financial plan limited to only one perspective

Now that we have discussed what a holistic financial plan is not, let’s take a closer look at what it is.

What Does a Holistic Financial Plan Include?

A holistic approach looks at an individual’s lifestyle, goals, values, and priorities to create a financial plan that works for them. Financial planners can coordinate these needs and the lifestyle of their clients in order to create a strategy.

A holistic financial plan may include:

Investments (portfolio, brokerage accounts, ETFs, mutual funds, etc.)
Retirement planning (finances and lifestyle)
Estate planning
College planning
Budgeting and saving
Retirement accounts (401k, 403b, IRA)
Insurance needs (home, auto, life, long-term care, liability, etc.)
Tax planning
Tax preparation

How Does Holistic Financial Planning Differ from Traditional Planning and Investing?

Many individuals tackle financial planning by focusing only on numbers. For instance, target rates of return, insurance premiums, the cost of a renovation on a home, and a nest egg for retirement.

While these numbers are important, they can be limiting to an individual who is developing a financial plan.

Benefits of Holistic Financial Planning

1. Holistic Planning Provides Flexibility

A holistic financial plan offers clients the flexibility to change course as their lives and goals evolve. These plans should be continuously evaluated and updated based on these changes.

2. A Holistic Financial Plan Can Align With the Client’s Values

While traditional financial planning considers the best outcomes for a client’s portfolio, holistic financial planning can consider other aspects which may be important to clients, such as values.

A financial plan that aligns with a client’s values may take the form of investing in companies with similar missions and values while still aiming for their financial goals.

3. Holistic Planning Can Help Clients Prepare for Unexpected Life Events

A holistic financial planning approach not only helps individuals prepare for expected life events but also unexpected ones.

Some examples of major life events where advisors can help include:

Sudden job loss
Unexpected inheritance
Divorce
Critical illness, and/or
Loss of a family member or loved one

4. Holistic Planning Prioritizes Tax Efficiency

Taxes should be an important consideration when developing any efficient financial plan. A holistic approach to financial planning can optimize tax efficiency by considering short and long-term goals.

This is especially important in retirement and estate planning. For instance, this can include strategies such as:

Tax-loss harvesting at year-end to offset capital gains, managing distributions from your taxable retirement accounts
Transferring assets to a trust
Making financial gifts to younger generations or a charity
Life insurance may also be used for estate planning purposes

5. Holistic Financial Planning Considers Retirement

Retirement planning is one of the most significant goals that clients will come to financial planners with. Holistic financial planning can help clients build a comprehensive plan for retirement that considers the entirety of the client’s financial situation.

For instance, a holistic financial plan can help to develop a portfolio that allows a client to maintain their lifestyle without actively earning income. Additionally, a holistic plan can include passive income sources that will be a fit for the client during their retirement.

How to Get Started With Holistic Financial Planning

At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.

We invest heavily into technology and systems to provide our clients with fully transparent reporting, and tools to make informed decisions around their wealth plan.

Read on to learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

September 29, 2022

3d rendering of corporate buildings with sunlight

INVESTING, NEWS

Why American Investors Should Invest in India’s Economy

With rapid growth across the economy and innovations in manufacturing, digital and information technology, India is proving to be an exciting investment for American investors. Additionally, India is home to a rapidly growing economy, the largest youth population in the world, and rising global competitiveness.

Read on to learn why American investors should invest in India’s economy and how they can get involved.

India Has a Fast Growing Economy

India has one of the fastest-growing economies in the world and shows no signs of slowing. According to the United Nations Conference on Trade and Development (UNCTAD) Trade and Development Report 2021, India’s economy is projected to grow at 6.7% in 2022 – the fastest in the world during the year.

Additionally, according to research provided by the Ministry of Finance, “India’s real GDP is projected to grow at 9% in both 2021-22 and 2022-23 and at 7.1% in 2023-24. This projects India as the fastest growing major economy in the world in all these three years.”

India Has the Largest Youth Population in the World

According to the United Nations Population Fund, India has its largest ever adolescent and youth population. The country will continue to have one of the youngest populations in the world until 2030.

Young people can transform the social and economic future of the country when supported with investments in their education, development, and leadership. Further, the current youth population is highly educated and will carry these skills into the workforce.

The National Infrastructure Pipeline

The National Infrastructure Pipeline (NIP) is a first-of-its-kind, whole-of-government exercise to provide world-class infrastructure across India and improve the quality of life for all citizens. Launched in August of 2020, NIP aims to attract investments to India and help the country reach its goal of becoming a $5tn economy by 2025.

Rising Global Competitiveness

India has exceptional information technology and business process outsourcing. The farm output and nominal factory output industries have pushed the country to be ranked third in the world based on purchasing power parity (PPP).

According to World Bank’s Ease of Doing Business Ranking 2020, India jumped 79 positions from 2014 to 2019. Within these years, the country moved from 142nd to 63rd.

India Carries a Widely Skilled Workforce

India has been an attractive option for investors because of the country’s low wages and highly skilled workforce. In fact, India has the third-largest group of scientists and technicians in the world. This has led to a series of innovations in tech as well as created a successful startup ecosystem.

What Are the Benefits of Investing in India’s Economy?

Due to its longstanding parliamentary democracy and liberal economic policies, India is a safer place than many other rising markets and put the country in investors’ minds for the past few years. Other benefits include:

Positive demographics
Strong economic growth
Stable government

How Can Investors Get Involved? Let’s Talk about Private Equity

Private equity (PE) is a source of investment capital that comes from firms or high-net-worth individuals that directly invest in private companies. These investments may take the form of:

Purchasing stakes in private companies
Acquiring control of public companies with plans to take them private and delist them from stock exchanges

Tune in to Our Podcast to Learn More

In Episode 48 of the Live Life Liberated podcast, we discuss how to diversify your portfolio by investing outside of the U.S. markets by taking a look at private equity investment opportunities in one of the biggest emerging markets — India.

In this episode, Derek Myron is joined by Manu Rikhye, partner at GrowX Venture Management. They talk about the emerging sectors in India and how you can invest in early-stage businesses during the different rounds of venture capital funding.

Manu talks about:

Why more companies are opting for private equity instead of an IPO
Factors that make India an attractive market to invest in today
The investment life cycle of a company from idea stage to a large enterprise
Mortality rates for early-stage businesses and expected returns if they succeed.
And more

Learn more about Private Equity Investment Opportunities in India in our podcast, Live Life Liberated.

Disclosures

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.

September 15, 2022