A First Foundation Blog

What is Wealth Planning? Pt. 3: Investments

4 minute read

It is no secret that one of the key factors in obtaining financial security and freedom is having enough financial resources to live the lifestyle you want before and after retirement. Effective wealth planning is not only determining how much is needed to obtain the financial security and freedom you desire, but also developing an investment plan to accumulate and protect those resources.

So how do investments fit into a wealth plan? To properly address investments within your wealth plan requires you to determine which type of investments vehicles or products (for example, cash, equities, bonds, and real estate) to invest in. How this decision is made depends on various factors, but most often is driven by a) the stage of life you are currently in, and b) your wealth planning objectives.

The Wealth Building Stage

This stage is applicable to individuals who need to accumulate enough funds to reach any wealth planning goals that can extend beyond retirement goals. It can include other long-term goals such as buying a first home or college planning for your children. To achieve these goals efficiently would mean not only creating a savings and budgeting plan, but also an investment plan to help you grow what is saved. Of course, you must be willing to take on a certain level of risk, because unlike some bank-related products, investments are not insured against losses. A plan that thoughtfully addresses investments will take into the account the amount of growth required and the corresponding risk to obtain such a return.

As you likely expect, the amount of growth often depends on the amount of risk you are willing to take. Investments which offer higher so-called “upside” are typically subject to more market risk. This also means they could be subject to higher levels of volatility, which could result in higher relative returns but could also result in large drops in asset value. Your investment time horizon should also be considered. Taking too much risk the closer you are to the time when you need the funds could result in a drop in the value of your account at a time when you need the funds. This could adversely impact your ability to achieve your goals. That is why it is preferable to invest in assets susceptible to more risk when you have a longer time horizon to absorb possible losses, so that you can benefit from the overall higher growth potential of “risker” investments. For example, you wouldn’t necessarily want to use investments to “save” for next summer’s vacation, a car for your next birthday, or a new pet for the holidays.

That said investments are a great way to grow your assets if you give yourself time. On a risk-adjusted basis, investing in the stock market is still a solid way for you to obtain capital appreciation that will help you grow your wealth over a long-term time horizon. Nevertheless, you need to create a wealth plan to properly determine your mix of assets within the level of risk you are willing to take. You need to identify the investment vehicles that fit your profile. This is usually not a do-it-yourself endeavor. Unless you are willing to commit the hours of time and energy associated with educating yourself on investment options and the related tax implications, it is usually wise to seek professional guidance. And while there are plenty of online resources for you to peruse, turning to a professional to help you with your wealth plan is a smart choice.  

Protecting Your Wealth

One final consideration to incorporating investments into your wealth plan is protecting the wealth you have invested. This does not mean “burying your money” and taking no risk. You are more likely to be able to achieve the desired lifestyle throughout your retirement if you are able to maintain a level of growth, and thus continue to accept some level of risk. That said, as you near completion of reaching your investment goals, you should reduce the risk of your investment portfolio. This will mean a lower return goal than what was needed when you started out, but still should be enough growth to maintain your spending power by keeping up with inflation. Although the overall rate of inflation has been generally low, certain items such as medical expenses continue to inflate at a much higher rate, and your investment plan should address this as well.


No matter where you are in your financial journey, investments can play an important role in your wealth plan. They can contribute significantly to growing your wealth, but it is important to factor in all the associated risks and the time horizon before you jump in. If you are building your wealth or at the stage of life wanting to protect your wealth, our focus is to help you create a wealth plan to put you on the path to achieving your financial goals.

If you are already a client of First Foundation Advisors, please reach out to your financial advisor to learn more.

Read Part 4: Risk Management


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by First Foundation Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from First Foundation Advisors. Please remember that if you are a First Foundation client, it remains your responsibility to advise First Foundation, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. First Foundation Advisors is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the First Foundation Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request, or at  Please Note: First Foundation Advisors does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to First Foundation Advisors’ web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Daniel Fan, J.D., LL.M., CFP®, Senior Managing Director – Head of Wealth Planning
About the Author
Daniel Fan, J.D., LL.M., CFP®, Senior Managing Director – Head of Wealth Planning
Daniel Fan serves as the Senior Managing Director – Head of Wealth Planning for First Foundation Advisors. In this role, he oversees the firm's Wealth Planning department and advises clients on sophisticated wealth strategies. Mr. Fan has over 15 years of experience as a Wealth Planner and specializes in evaluating and optimizing all clients' wealth plans to meet their financial needs. He works closely with all teams across First Foundation and ensures he delivers a personalized experience to support all clients. Prior to joining the firm, Mr. Fan was a Senior Vice President, Director of Wealth Planning and Insurance at First Bank Wealth Management, where he implemented the financial planning process for all business segments. He also worked as the Vice President, Regional Director, Senior Wealth Strategist at Union Bank Private Wealth Planning and as a Senior Vice President, Senior Wealth Planning Strategist at Wells Fargo Private Bank. Mr. Fan is a Certified Financial Planner® and holds his Juris Doctorate and Master's in taxation from Pepperdine University School of Law and Golden Gate University respectively. He earned his Bachelor's degree from the University of California, Los Angeles. Read more