Financial planning is a lifelong process. At Financial Planning Matters you can trust in our experience and expertise to guide you on your journey to achieving your financial goals. From building a portfolio to sending your child to college or planning for retirement, we will create a tailored plan to suit your needs.
THE RIGHT MINDSET
If you have the mindset to accomplish your goals, you are in a better position to make them happen. Your mindset is the foundation for Your Complete Financial House.
Before actor Jim Carrey was successful he wrote himself a cheque for $10 million for acting services rendered, post-dated it 10 years, and kept it in his wallet. We all know how successful Jim became, and we truly believe it was partly because he had the mindset to overcome the difficulties of breaking into acting and becoming extremely successful.
With the right mindset, you can achieve your financial dreams and goals.
What do you want to be doing in the next phase of your life? Paint a picture of your life 5 years from now, 10 years from now, and beyond…
What’s most important to you?
If you have specific written steps with due dates, you will be more inclined to stick to them. Breaking down a long-term goal into small achievable steps will help you accomplish the big goal.
- Write them down.
- Prioritise them.
- Set time frames
- Can you stay on course to achieve all of your goals?
- Are these dreams and goals important to you?
- Will you create a plan to accomplish them?
- If you have a plan you will be better equipped to stay on course, but will you commit to a plan?
- Also, are you willing to make necessary adjustments along the way?
Without a strategy, you will not have a playbook to guide you from your visions and dreams, to your realities.
Without a clear game plan and neglecting to make the necessary adjustments to your strategy if its not working, you are more inclined to give up on your goals. If you were able to earn 5% on your money and wanted to save €1,000,000, would you know how much to save each year, or even each week?
Do you know where it’s best to save money? This is where you assess your current situation.
GATHER YOUR DATA
What do you want to be doing in the next phase of your life? How and where do I determine what I will need to create a strategy? What information do I need? It’s all about your expenses. How much are you expecting to spend right now? How much will you spend in retirement?
Are your assumptions accurate and realistic?
If your assumptions and expectations are so far out of reach, the strategy you put in place will not work. However, that does not mean you shouldn’t start with your dreams. If your goals and dreams are important enough to you, and you exercise the steps written under the previous section, Foundation, you may be able to come up with a strategy and ultimately achieve them.
CREATE A WRITTEN PLAN:
Do I really need a written financial plan?
Studies have shown that those with a written retirement plan are three times more likely to achieve their retirement planning goals than those without one. When you have a written plan, it will serve as a blueprint containing all the steps that are necessary to achieve your financial goals.
You need to have a tactical game plan to grow your assets, optimise what you keep after taxes and preserve and protect your assets in case of an unforeseen event.
How much do I need to earn on my investments to make my plan work? How much do I need to save to make my plan work? How should my investments be allocated among different asset classes such as Equities, Bonds and Cash?
A one percent difference in your investment rate of return does not seem like much, but over a long time frame, it could be hundreds of thousands of euros or the difference in whether you achieve your financial goal or not.
It is extremely important to match your expected rate of return with your risk tolerance and time horizon to determine what you need to succeed.
How do I minimise my income taxes? How do I maximize financial strategies such as turning company profits into personal wealth? How much you keep after taxes will impact your financial plan, so determining where to invest your money, such as a retirement plan or company investment to minimise your current taxes and have your investments grow tax deferred, need to be incorporated into a financial plan. Nobody knows how long they’ll live, but creating a strategy to maximise not only your pay-out, but also your spouse’s pay-out in case of a death is a critical piece of a financial plan.
What happens if I have unexpected expenses? What if I lose my job? What if I get sick? What about a premature death?
It’s great to plan for all your dreams and goals but you need to incorporate “what if” contingencies into your financial plan. In case of an unfortunate event, you should also have all the required legal documents such as a Will and Power of Attorney.
THE FINAL PIECE OF THE JIGSAW
Without tracking your progress, how will you know if you’re on track to achieving your goals?
As mentioned, if you wanted to save €1,000,000, you can stay on track by determining each year whether you are saving enough.
How do I monitor my plan? How do I track my progress? When should I make adjustments? It’s great to create a written financial plan, however, life changes and your plan needs to be modified or even re-done along the way to reflect those possible changes. Setting up intervals, such as quarterly or yearly reviews, will let you know if you are on track. If you’re not on track, you can determine what you need to change to get back on track. That’s the power of tracking your goals, you’ll know if and when adjustments need to be made.
Whether you create your own Complete Financial House or you work with an CERTIFIED FINANCIAL PLANNER (CFP®), you will be on your way to making your lifetime dreams and goals a reality