This financial adviser breaks down taxes and estate planning into 3 simple charts

By Beth Pinsker

These images can help you wrap your head around how to manage your money

Financial planners have all sorts of sophisticated tools at their disposal to help them do their job of managing your money.

Max Pashman has Canva.

Pashman is a 32-year-old certified financial planner from Los Angeles who mostly deals with clients in their 30s, 40s and 50s who are reaching their peak earning years. He focuses on holistic planning, not just money management - and along the way, he realized that most of his clients didn't really understand the process.

So he learned Canva, a design program, in order to illustrate concepts to his clients in a simple yet effective way. He started to post the graphics, first to his LinkedIn account and then to his other social-media accounts, and they started to get noticed. He now has more than 100 graphics, and he is coming up with more all the time.

"I didn't think what was already available was putting it in a way that a third-grader could grasp it. There would always be too much text to explain things - multiple sentences - and I had to squint my eyes. I thought, why don't we just look at the big picture?"

Pashman shared a trio of his graphics with MarketWatch that, taken together, can explain basically all the core elements of financial planning - no textbooks needed.

First of all, what is financial planning? It's not what people think. "I made this one because people misunderstand what the role of a financial adviser is. They seem to always think it's about being a portfolio manager, focusing on maximizing return. That can be the role of some, but if you really get into the business of financial planning, it's more than meets the eye," Pashman said.

This graphic did particularly well with the adviser community, and many have shared it with their own clients. "It's a way to get across the point without having to send clients multiple essays," Pashman said.

The first visual that Pashman made, a little over a year ago, was a chart about tax brackets. He started there because so many of his clients misunderstand how their income is taxed in the U.S. system of progressive taxation. One consequence is that when they have to make decisions as simple as how much to contribute to their 401(k), they don't understand how that affects their finances overall.

Pashman found that his clients were confused - and a little mad - about how making more money meant they got taxed more.

"They [would] say they didn't want a raise or a bonus because they were afraid of the taxes that would ensue. That's just a misconception about income brackets," Pashman said. "People focus on the top bracket, but in reality, your income is tiered into multiple sections."

When he has clients come in with any sort of tax-planning question - and basically everything is a tax-planning question at heart - he shows them this illustration so they can really see what they are dealing with. "I use this so they see the relationship between where their income is today and where you expect your income to be in future. That could indicate to us whether it makes sense to do something like IRA conversion to a Roth now or in the future," he said.

Finally, while estate planning often gets short shrift in financial-planning discussions, it's just as important to plan for your money after you die as it is to manage it while you're alive, Pashman said.

"This one came about because I found that when we talk about estate planning, there seems to be a belief that it's just for ultrahigh-net-worth [people], those who would be subject to estate taxes," he said. "But every family should be implementing something like this."

Pashman wanted this graphic to focus on more than simply the strategies involved in estate planning and to show the meaning behind all of it. He structured it to read like an estate-planning flow chart that leads to the real purpose of such planning, which is to take care of the people in your life.

That end goal - peace of mind - is really the base of the core elements of financial planning that are broken down in the first graphic. And the response was not just social-media reposts: Pashman said he's had inquiries from potential clients because he piqued people's curiosity about what they need to do.

"It's easy for some people to approach financial planning from a mathematical perspective, but when we meet with each other, we get a totally different reaction from a psychological factor. That's really what financial planning is about," he said.

More from Beth Pinsker

Take these two simple steps to get wealthier, says finance guru Dan SolinDon't get swept away by 'S&P 500 envy' as stocks shatter records and bonds lagWill Social Security still be around when you retire? That's at least a $500,000 question.

-Beth Pinsker

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05-25-24 1206ET

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