Five Efficient Uses of Money

Our clients find it helpful to understand the five efficient uses of money.

When you earn a dollar or are given a dollar, you can:

  • Give it away

  • Spend it on your living expenses

  • Spend it on taxes

  • Spend it paying off debt

  • Save it

Our process helps our clients:

  • Increase their standard of giving over the course of stewarding their lives

  • Monitor and regulate their standard of living so they spend less than they earn

  • Avoid paying unnecessary taxes

  • Eliminate bad debt first, then good debt in the most strategic manner

  • Prudently save, invest, and grow their earnings or gifts over their lives

As a full service advisory firm, we do more than advise and get paid by our clients for managing their money. We work hard to develop comprehensive life stewardship plans tailored specifically to the values-driven goals of our clients. We often find ourselves working with our clients’ other advisors — their accountants, attorneys, financial advisors, and insurance agents. Most often we end up serving as the quarterback to the advisory teams of our clients.

Many clients express their wish that they had found us much earlier in their life stewardship journey. Perhaps they would have made fewer mistakes along the way.


We at BRS believe stewardship is about relationships. Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.

Put Relationships First

Relationally Focused Stewardship Cures Anxiety

When put into practice the first BRS distinctive that stewardship is primarily relational, not financial, can provide a great cure for anxiety about the future.

We help our clients focus on relationships and transform their retirement goals into a simple question:

“How much do you need in savings to fund your living expenses through death.”

Note that it’s not a net worth goal of $X million. (What’s your number?).

It’s not a goal to save enough so that you can spend an amount equal to 80% or 90% of your highest income earning years until you die.

Have you noticed how most advertisements by financial advisors and firms subtly play off your fears of not having enough money in retirement?

This is a common selling technique backed by psychological and neurological research on perennial human fears related to safety and security. The ads are designed to tap into your “lizard” brain, that deep part inside of you that reacts instinctively either with a “flight” or “fight” response.

As advisor fiduciaries who must earn your trust, we do not believe that selling ourselves or services through fear-based, anxiety-producing techniques is right. It’s not how we want to be treated by those who advise us.

And we do not believe it builds the kind of trust between an advisor and client that should be built. At the most fundamental level, we do not believe it values relationships over finances. If you think about it, you really don’t want an advisor who stokes your fears to move you to decisions that might put his financial interests ahead of yours.   

So what we do is flip the motivation for planning around by emphasizing its relational core. Instead of negative, fear-driven reasons for decision-making, we help our clients cultivate a vision of life motivated by positive, trust-driven planning.

What we and our clients have discovered is that this kind of relationally driven stewardship becomes the cure for financial anxiety. And it creates a freedom from money worries rooted in unhealthy self-focus and fears about the future, liberating clients into living a life of self-giving for the good of others.

Clients find their minds and their time freed up. Their talents and experience become more and more available to serve others. And, being assured that they have enough to live on until they die, they realize that they have much more financial and other resources available to help others, as well. Once our clients realize that they have more than enough in retirement savings to live on, they begin to experience the liberty of finding the kind of deep-rooted, soul-satisfying joy that comes from being a generous steward.

This is the cure for financial anxiety induced by the American Dream.


We at BRS believe stewardship is about relationships. Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.

Put Relationships First

How the Tax Control Savings Plan Works

It may seem counter-intuitive that a generous steward must be a wise, prudent saver.

But it’s not.

What we often find with our clients is that the ones who give the most usually have savings that are growing and multiplying.

And when our clients hear and begin utilizing our Tax Control Savings Plan, or TCSP, they discover a new motivation for saving and giving.

The starting point of understanding the TCSP is that there are three basic ways savings are treated for tax purposes:

1.   Money goes into savings before paying taxes (i.e., pre-tax), thus saving tax dollars, and grows tax deferred. When it comes out, it is taxed at ordinary income tax rates.

2.   Money goes into savings after paying taxes (i.e., after-tax), and is currently taxable as ordinary income (dividends, interest, short term capital gains) or at more favorable capital gains rates for long term capital gains.

3.   Money goes into savings after paying taxes (i.e., after-tax), grows tax-deferred or tax-free, and when it comes out it is tax-advantaged (i.e., generally not subject to any taxes, provided the distributions are handled properly and there are no gains inside any of the assets, such as municipal bonds). The savings vehicles available in this bucket are relatively few: Roth IRA, Roth 401(k), Roth 403(b), municipal bonds, and cash value life insurance.

BRS’s Tax Control Savings Plan helps our clients develop a finely tuned and refined method of enhancing the safety, efficiency, and control of their savings. This in turn allows them to be more secure in their present giving and more generous in their plans for giving in the future.

This correlation between saving and giving is liberating for our clients. Whereas before they may have been bound by fears of not having enough in savings for the future, they are now able to do their “giving while they’re living so they are knowing where it’s going,” as Ron Blue famously says.

And the BRS Tax Control Savings Plan is how they arrive at this happy place in their stewardship journey.

Here’s how.

Most of our clients understand the power of pre-tax savings using a defined contribution 401(k) plan with company match, an IRA, defined benefit plan, or other qualified plan governed by ERISA and the Internal Revenue Code. Most of our clients have savings in one or more of these these kinds of qualified plans.

Every dollar that goes into the plan saves you taxes, right? So if you are in the 30% tax bracket, you save 30 cents. If you are at 40%, then 40 cents. And if you company provides a match, that’s free money. So take it.

Many of our clients have most of their wealth in IRAs or a 401(k) plan.

When they retire and begin taking money out, it will be taxed at their marginal tax rate. This works well if the rate is low, but it’s risky if rates are higher. Most Americans believe that tax rates will most likely increase. Take a look at the graphic below and tell us what you think.

If tax rates increase in the future because the government needs more revenues to pay down the trillions of dollars of debt it is in, then your pre-tax savings could get wiped out fast.

That’s why our TCSP is so important and helpful. It’s a diversified savings methodology that helps you be able to adjust to future economic and tax rate changes.

Second, you will want to have savings in what we call the “after-tax, currently taxable” bucket.

These are things like stocks, bonds, mutual funds, money market, certificates of deposit, other interest bearing accounts, and pass through dividends from business you may own. The savings go into this bucket after you have paid taxes on them or after you have inherited non-qualified assets. As they grow you are taxed at ordinary income tax rates on the dividends, interest, and short term capital gains. Long term capital gains are taxed at lower capital gains tax rates.

Many of our clients are highly successful doctors, entrepreneurs, and business owners who have most of their wealth and savings tied up in their practices or business ventures. This gives rise to the need for wise succession planning that we help our clients implement.

Planning for a liquidity event from the sale of a practice or business is important. And thinking through the grid of the TCSP helps our clients make sound decisions regarding how best to avoid unnecessary taxes and allocate the after tax savings to the before tax, currently taxable, or tax advantaged buckets.

Third and finally, in order to diversify your savings and provide a hedge against a high tax rate environment, you will want to have savings in a tax-free bucket. Money saved here and withdrawn properly generally comes out tax free.

You will want to start this as early as possible. Or you can help your children and grandchildren jump start their tax free savings. The savings vehicles available in this bucket are the Roth IRA, Roth 401(k), Roth 403(b), municipal bonds, and cash value life insurance.


We at BRS believe stewardship is about relationships. Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.

Put Relationships First

Using the Tax Controlled Savings Plan to Leverage Your Legacy

Imagine knowing that your ReHirement is fully funded from your tax free bucket or through a combination of your currently taxable and tax free buckets.

Not only are you free from worries about future tax rate hikes and certain that you have enough in savings to fund your living expenses through death, you are also free to leverage your stewardship legacy by strategic giving from your before tax bucket.

The wise, patient application of BRS’s TCSP is how you get there.

There are a variety of different strategies for leveraging your legacy using before tax savings, and each depends on the client’s particular facts.

One strategy is to make current gifts from your before tax bucket and utilize distributions or Required Minimum Distributions (RMDs) to fund life a second to die life insurance policy on a husband and wife in an Irrevocable Life Insurance Trust (ILIT) for your heirs.

The proceeds from the policy in the ILIT will go to your heirs income and estate tax-free.

 

This allows you to do your “giving while you’re living so you’re knowing where it’s going” and at the same time know that you are replacing or even multiplying the wealth transferred to charity with the life insurance.

When you pass away, the remainder in your before tax bucket can be giving to charity. Those funds never incur any tax burden related to the Income with Respect to Decedent Tax (IRDT), gift, or estate tax (if you have a taxable estate).

Furthermore, you enjoy knowing that you have been a good steward by efficiently utilizing the tax code to allow you to take charitable contribution deductions using pre-tax money and at the same time the  And the great thing about it is that the money has never paid tax (except for any RMDs or withdrawals used to fund the ILIT).


We at BRS believe stewardship is about relationships. Careers, reputation, financial stability, and personal goals are all important pursuits. However, none should come above our relationships with family, friends, and our community. Our relationships are the cornerstone by which we leave a positive impact and lasting legacy.

Put Relationships First