The financial plan must be more than just a summary or report. A person who is near retirement will often have a written plan prepared and stored away.
Dave Ramsey, a great contributor to financial services, once said that financial plan is 20% planning and 20% behavior. This statement has a lot to be true. Financial planning is not just about the behavior of those planning but also of advisors who might be engaging them to create a financial plan.
Financial planning is a process. It is not an end product. Planning involves goal identification, exploring individual and family values, purpose exploration, establishment of a trust team of advisors and careful construction of strategies, tactics, selection of tools, implementation and careful monitoring. Each of these areas needs to be carefully considered and understood.
What is Important to You and your goals – It is crucial to invest a lot of time in this first step of the financial planning process. This step is an essential part of financial planning, but it often gets overlooked. Planning is crucial to determine the most important goals, and to ensure that wealth is aligned to purpose and values so that it creates fulfillment for the future.
Your advisor team should be carefully selected. Selecting advisors is like selecting a winning sports team or business team. Selecting advisors of high competence, objectivity and reputation is essential. However, you also need to choose advisors that are willing and able to communicate with each others and work together. When forming a group of advisors, one of the greatest challenges is the lack of communication between the CPA, CPA, estate planning lawyer, and business attorney. To be successful, a team should communicate openly with each other and collaborate on your behalf.
Creating the Financial Plan – This step involves the construction of a written financial plan. The plan is developed in collaboration with your advisors. You need to ensure that your plan connects with your goals, values, and purpose.
Implementation of your financial plan – This is a team effort that requires communication and collaboration. The action plan should be written and shared with your family members and any advisors. A system that makes it easy to follow the steps is recommended. These actions should be precise and specific with dates and communication to allow for tracking of the progress.
Monitoring your results – This is often the reason a plan can fall apart. It is necessary to keep track of your results, communicate regularly and be consistent. But, what is most important is your commitment to you and your advisors to continue working towards your goals. It’s a similar process to running a business. Discipline, focus, and the ability to follow through are crucial for success.
This is a brief description about a successful financial planning strategy. It is important to know the steps involved and how to execute them in order to achieve your Ed Rempel Review goals.