By Jeff McClean and Zach Whitchurch
At Solidarity Wealth, we don’t just talk about managing money—we live it. As entrepreneurs, we’ve navigated the same challenges our clients face: balancing the demands of building a business with establishing financial stability for our families. These experiences have shaped how we manage our own wealth and how we collaborate with others to address similar complexities. Whether you’re a founder with most of your net worth tied to your business or an executive navigating equity compensation, having a dynamic strategy can help support your aspirations. That’s where our 5-Bucket Wealth Allocation Strategy comes in—a straightforward framework for building resilience, balancing growth opportunities, and adapting to life’s financial shifts.
The 5-Bucket Wealth Allocation Strategy
Our approach to managing our personal wealth, as well as the guidance we offer clients, centers around our “5-Bucket Wealth Building Strategy.” These buckets—cash, fixed income, core equities, real estate, and venture capital/private equity—represent a balanced framework for organizing wealth.
Like many entrepreneurs, much of our wealth was initially tied up in our own business. This experience is also familiar to many tech executives, who frequently find their portfolios heavily weighted toward company stock and options. In these cases, the venture capital/private equity bucket reflects not only a significant portion of their net worth but also the inherent risk and reward that comes with being deeply invested in a single venture.
Typically when you are a business owner you pour your heart and soul into your business. You spend much of your time and energy there. To get a business started it also tends to take much of your own money or capital to get the business. To offset the heavy allocation to your business venture, the second bucket that naturally starts to get filled is the cash portion on the other side of the risk spectrum, establishing a type of “barbell” approach. For us, and for many clients we work with, this bucket acts as a financial cushion, offsetting the inherent uncertainties of entrepreneurship. Building a solid cash reserve after a business gains traction creates a sense of security, ensuring that family living expenses are safeguarded even if the venture faces setbacks.
It’s important to remember that everyone’s own situation is unique. Many of our business-owner clients are comfortable with less cash holdings, whereas someone who has more immediate needs for cash (building a house or addition, paying college tuition) may want to keep more cash on hand.
Filling the Middle Buckets
As a business starts to continue to grow and is producing enough cash to pay for all your responsibilities the next question tends to be, “where else should I invest?” While yes, most entrepreneurs are very comfortable with risk and betting on themselves, there is a good sense to fill the middle buckets of your allocation to help with diversification of not only your assets but diversification into investments that require much less of your time and attention directly. The next step is to consider the middle buckets, where both of us find ourselves at this point in our financial lives. Now that we have each end of our investment spectrum completed, the next two buckets to look at are fixed income and core equity.
Real estate is the fourth bucket that rounds out our diversified personal wealth strategy. When reviewing someone’s balance sheet, the goal is to have the right investments that allow them to accomplish what matters most to them. Personal residences typically should not be counted toward an investment bucket because your home is just that—your home. While selling a personal residence at the right time can generate a profit, it also requires relocating, which can tie up some of that capital. Instead, investments in commercial or residential rental real estate should be considered. Ultimately, it comes down to finding the right property at the right price to ensure this bucket is filled appropriately.
Two Important Concepts
Our strategy is often visualized as pouring water into a set of nested cups: you start with your immediate needs, and when that cup is full, the excess flows into the next, and so on. However, the path to filling these buckets isn’t always linear. While it’s critical to ensure your income is secure—especially as a foundation for long-term stability—it’s equally important to remain flexible and opportunistic.
Rather than rigidly moving from cash to fixed income to equities, the approach can be adapted based on your circumstances, goals, and market opportunities. For instance, if your cash flow and security are already robust, you may choose to bypass fixed income and focus on core equities or “other” income-producing assets that align with your broader strategy. This dynamic process allows you to capitalize on the right assets at the right price, ensuring your wealth-building strategy remains both intentional and opportunistic.
Having a system in place, coupled with the excess cash flow to seize opportunities as they arise, is paramount to building wealth and achieving diversification across the five buckets. By thoughtfully balancing security and growth, you can create a structure that not only withstands market challenges but also positions you to act when favorable opportunities emerge.
We’re Here for You
Every person’s entrepreneurial journey is different. Building a financial framework takes time, careful consideration, and the right partnerships. By aligning your decisions with your goals and staying adaptable, you can create a structure that’s resilient to market challenges and flexible enough to embrace new opportunities. The focus is on creating a foundation that supports what matters most to you—whether that’s family, legacy, or a meaningful life.
Ready to explore what a tailored financial strategy could mean for your future? This article only scratches the surface of what’s possible when you have a team like ours by your side. Let’s uncover how we can help you tackle your unique challenges and unlock your financial potential. Reach out to us at info@solidaritywealth.com, contact us online, or call 385-374-1665 to schedule a discovery call.
About Jeff
For over a dozen years, Jeff McClean has advised some of the country’s most successful families on all aspects of their wealth. With his background as a former tax and estate planning attorney at a prominent Houston, Texas, law firm, Jeff has advised clients through business sales, funding rounds, IPOs, complex tax and wealth planning transactions, private and public market investments, executive compensation packages, succession planning, and much more. In short, Jeff helps clients navigate the unique challenges that come with building wealth and helps them better predict their financial future.
In addition to co-founding Solidarity Wealth, Jeff advises single-family offices on a broad array of challenges. He also serves as the Managing Partner of Solidarity Capital, an income fund managed separately by the Solidarity partners.
Jeff is a sought-after thought leader on a wide range of tax, finance, and estate planning topics. Jeff has been quoted in Yahoo! Finance and Kiplinger’s, has published in diverse publications from Silicon Slopes magazine to the Taxation of Exempts journal by Thomson Reuters, and has spoken to audiences ranging from the Estate Planning Section of the Utah State Bar to the Nonprofit Organizations Institute to large company conferences.
Jeff holds a bachelor’s degree in accounting from Brigham Young University – Idaho and a Juris Doctor, with honors, from the University of Texas School of Law. Outside of work, Jeff is married and the father of three amazing children. He has also served as past president of the Salt Lake Estate Planning Council.
About Zach
Zach Whitchurch is the President and a wealth advisor at Solidarity Wealth, a privately held, independent wealth management firm that serves as a multi-family office to some of the Mountain West’s most successful families, technology entrepreneurs, and executives. Zach works with clients to develop both “Wealthy Financial Habits” and “Healthy Financial Habits” and thrives on helping them understand their finances by simplifying the complex. He uses his broad knowledge on a wide variety of topics to implement creative strategies for clients as he helps them feel both seen and heard and supports them along the path to their dreams.
Zach has a bachelor’s degree in accounting and a master’s degree in finance from the University of Utah and holds the CERTIFIED FINANCIAL PLANNER® and Certified Private Wealth Advisor® designations. He is also a Managing Partner of Solidarity Capital. Outside of work, Zach enjoys spending time with his wife and four children and being active in both indoor and outdoor sports. He is also involved with coaching youth sports, and loves to read and learn about how the world works on a deeper level.
Solidarity Wealth is a registered investment adviser. This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Solidarity Wealth and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Solidarity Wealth unless a client service agreement is in place.
