Good financial planning is no accident
Good financial planning is no accident
You don’t accidentally wake up at 6 a.m. every morning and find yourself in the shower 15 minutes later. Behind the wheel of your car in the parking lot at work, you don’t marvel at the fortuitous chain of events that landed you there.
You’ve planned every step of this morning, and just like the events that carry you into each day, your longer-term financial life can and should be set in motion with a chain of reasonable, measured, and intentional steps. We call it “financial planning.”
The prospect of discussing their own personal finances may unsettle many folks, and fear of the unknown can dissuade even the most reasonable individual into taking few if any steps toward organizing and setting in motion their own financial plans. In the interest of clearing out the fog of fear from the common sense world of financial planning, let’s look at what a financial plan is supposed to do for you and your family.
What’s in a plan?
Comprehensive financial planning covers six distinct areas: investment planning, tax planning, retirement planning, education planning, insurance planning and estate planning.
What many financial planners fail to mention is that you may not need to embark on a comprehensive financial plan. Remember, doing at least a little planning is better than doing none at all.
How to lounge poolside
Imagine yourself and your family about 10 years from now. Do you see your children frolicking in an in-ground pool in the backyard? Maybe you are lounging poolside surrounded by a menagerie of perfectly pruned shrubbery in the shape of exotic animals, and you are being fanned with palm fronds by a cadre of staff who cater to your every whim.
If you don’t currently have that in-ground pool and you haven’t yet found the funds to employ the staff, then these can be considered “financial goals.” This is what a financial plan does, it helps you define your goals and, if possible, it lays the groundwork in a framework of steps for you to meet those goals. It really is that simple.
It’s all about the process
The process for financial planning involves working with a Certified Financial Planner through six distinct steps.
Step one: Engage a financial planner, who will gather information about every aspect of your financial life. The planner will ask in-depth questions about your assets, income, liabilities, insurance coverage, investment portfolio, tax situation and your end-of-life plans.
The reason it is often difficult to discuss your financial life with others is because it feels so incredibly personal, but remember that the best financial planners tackle this and every step of the planning process absent judgmental attitudes. Frankly, we ask these questions and discuss these issues daily with our clients, so if you don’t feel comfortable having these conversations with your own planner, you may need to find another with whom you can be a little more comfortable and candid.
Step two: This involves establishing and prioritizing your financial goals while setting timelines for achieving them.
Step three: This step can be a little sobering, as it involves in-depth consideration of how reasonable your goals may be, and if necessary, it involves consideration of alternative courses of action.
Step four: The financial planner digs in deep to crunch the numbers after having assessed risk tolerance when investing, the effects of inflation on your goals and your portfolio, and many other details of your financial life.
Step five: You receive the organized and cohesive steps that have been put together to help you reach your goals. If your goals cannot be reached using the current assumptions of your financial life, then this step can provide you additional alternative goals.
Step six: No financial plan ends with the delivery of the plan. In fact, most financial plans don’t end until you do. That’s why this last step is the constant revisiting and revision of the plan as the particulars of your life change. The best planners work closely with you throughout your life to help you meet the goals that are most important to you, while at the same time bringing a little bit of reality to those goals that may not be achievable given your current situation.
Anthony M. Conte is Managing Partner at Conte Wealth Advisors with offices in Camp Hill, Pennsylvania and Fort Myers, Florida. He has a Master’s Degree in Financial Services and the CERTIFIED FINANCIAL PLANNER ™ certification, and he welcomes your emails: firstname.lastname@example.org.
Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Conte Wealth Advisors, LLC are not affiliated.