Preface — Why "Save and Draw Down"
What this book means by "family office"
A family office is the team a wealthy family sets up to look after all of its money in one place. In this book the term means that way of working, taken down to the size of an ordinary household: one ledger for the whole family, written rules, and a reason recorded for every decision. It names the direction this book and the AI Family Investing site are heading.
What the site does today. AI Family Investing is a research and education tool that organizes a household's financial information, calculates pensions, taxes and a spending range, and lets you compare results under different assumptions. It does not provide investment advice, money management, tax filing, or estate or legal services, and it does not offer, or claim any exemption as, a "family office" in the legal sense (an investment organization serving a single family).
The title has two verbs: save and draw down. They sound like retirement words, but in this book they mean something broader.
Over a lifetime, a family's wealth moves in only two directions. While you work, it builds up in pensions, accounts and a home. Then it goes out — as living costs in retirement, as help given to children while you are alive, as what passes on after you are gone. Buying a home is saving; selling it is drawing down. When to start a pension, what to pass on, to whom and when — these are all versions of one question: "How much do we put away, and when, and how much do we take out, and when?" That is why this book starts with the retirement plan (Part 1), goes through the kinds of products that plan calls for (Part 2), and ends with the home, gifts and the estate (Part 3) — all on one household's ledger.
The first words of the title, "only what the evidence supports," are the rule. Whether saving or drawing down, act only as far as you have checked which inputs, assumptions and rules a number came from, and what the calculation left out. Leaving what you do not know as "unknown" is part of that rule.
That is, in the end, what a large family office does: it puts the flow of a family's wealth over a lifetime on one ledger, writes down its rules, and records the reason for each decision. This book tries to bring that work down to household size — and to the situation of families whose pensions, accounts and homes are spread across more than one country. The site helps with the calculation; the family makes the decisions. To be exact about scope: the ledger can hold pensions, accounts and homes from several countries, but the calculations today cover selected US rules (and some Korean rules on the Korean screens), and foreign taxes, treaty relief and currency risk are not modeled. At the end of Part 1 (Chapter 8, Section 8.7) is a one-page "first ledger" your family can use with or without the site.
This book is not investment advice or personalized investment, tax or legal advice.