Imagine you are taking a long-anticipated, well-deserved vacation. You researched the destinations and points of interest along the way that you hope to visit. You scoped out popular restaurants and the various activities you can hardly wait to enjoy. You have read every guidebook and Internet blog rating the best hotels or BNBs and asked travel-worn friends for first-hand tips. You even hired an experienced travel agent and a couple of tour guides to ensure that your vacation has the best chance of being a successful experience. If Americans would only spend as much energy planning their life’s goals as they do their vacations, their outcomes might be more successful.
There are many reasons people do not engage in financial planning; it might be the perceived cost and time commitment, or possibly lack of a relationship with a competent planning firm, but for many it is pure procrastination. Although it requires some effort on your part, the process of creating, adopting, and maintaining an intelligent, goals-based financial plan is pretty straight-forward and can be greatly enhanced with the oversight and assistance of a Certified Financial Planner® professional. Hardly anyone would build a home without a detailed set of plans carefully created by a professional architect. Yet everyday people go through life with little or no thought of what it takes to achieve their most important life’s’ goal.
To get started you first need to define and prioritize your goals and objectives and reduce them to writing. To borrow a quote from the late Zig Ziglar, “A goal properly set is halfway reached.” People in different stages of life will have different goals. Millennials may be interested in paying off student loans, saving for a down payment on a first home, and possibly planning for a family. Generation Xers may be more concerned about education expenses, adequate and cost-effective insurance or buying a larger home for a growing family. Baby boomers will be laser-focused on retirement and possibly helping out their kids, grandkids, or elderly parents. Retirees are typically interested in reducing risk, maximizing income from and the longevity of their assets, transitioning those assets to others, and simply enjoying a dignified retirement. Regardless of your stage in life, anyone can benefit from financial planning.
After your goals are set, you need to identify all current and future resources including your ability to increase savings, investment and retirement accounts, cash value from life insurance, real estate investments, the possible sale of a business, a potential inheritance, retirement pensions and Social Security. Additionally, your investments must be prudently managed in low-cost, tax-efficient, risk-appropriate strategies to ensure the resources will be there when needed. Your plan should be designed to offer you a reasonable probability of success, at reduced cost but without unnecessary risk. Finally, your plan is the process that holds you accountable to do the things you state you intend to do to achieve your goals. Financial planning is not a one-time event but an on-going process that requires oversight and tweaking over time to ensure that you stay within your confidence zone. If you want your life’s financial journey to be as successful as that vacation, careful planning can make a world of difference.
Sam Taylor, CIMA®, AIF®, CRPC® is the founder and CEO of Wealthview Capital, LLC a fee-only fiduciary wealth management firm headquartered in Jackson and serving families throughout the United States. The firm’s mission is to make a profound impact in the lives of its clients through the prudent planning, management, and utilization of their financial resources.