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A well prepared Plan is equal to half battle won !
When you begin considering a vacation, you might open a mapping app and start calculating the best route to your destination. As you plan your trip, you may search for restaurants, stores or entertainment along the way. The planning instils a sense of excitement and becomes an integral part of the journey itself.
In the same way, the act of developing a personal financial plan can provide as much value as the plan. While you are in the planning process, you take a series of steps to create your own, personalized road map for budgeting, saving and investing. This process allows you to draw a direct line from your financial actions of today to your financial destination.
Markets, like seas, are ever-changing and unpredictable. Successful market mariner must-have investment strategies that can “sail” when conditions are favourable and “row” when conditions are adverse. Sailing strategies help investors take advantage of the winds driving strong bull markets, while rowing strategies help them stay on course through bear market headwinds and choppy waters.
“What do you hope to achieve?”
Are your goals focused on your years in retirement? Are you trying to anticipate the needs of a growing family? Or perhaps your objective is to create more financial freedom. After defining your unique goals, you and your advisor work backward to determine the best routes for reaching those objectives. This process — assessing the condition of your finances about your goals — often opens investors’ eyes. By answering questions that may prompt you to dive deeper into your goals, you take the time to consider what’s genuinely possible once your financial considerations are no longer an obstacle. Thinking through these possibilities can provide insights about your future that you may not have previously understood or even considered.
Don’t let your present to suffer !
Some people subjugate and even ignore, their quality of life during their primes, in hopes of having a high quality of life later on when they might not be able to enjoy it. It’s as if the bulk of their working lives are merely a preamble to the more significant financial milestones they hope to achieve many years from now. Seems an oddly contradictory, if not vicious, cycle.
Part of the reason for this fixation on the future is that financial professionals tend to make recommendations based solely on outcomes, and don’t spend enough time or energy understanding the more immediate, human side of the equation.
And it’s no wonder: Many fundamental wealth management questions revolve around the destination, rather than the journey.
For instance:
How much will I need to retire?
How much do I need to save to pay for my child’s college education?
What will withdrawal rate allow my savings to sustain me throughout the rest of my life?
Yes, these questions are essential, and they must be answered based on each investor’s specific circumstances and goals.
But rarely do you hear financial advisors asking clients, “Are you happy?” Perhaps that’s because it’s a much more difficult question which steers advisors away from the analytical, numbers-based terrain in which they’re most comfortable
How investors can find balance:
As a financial advisor, I have seen many clients who can’t enjoy the now without feeling that their future is secure. And I know clients who can’t fathom the idea of de-prioritizing their present happiness for a lot that’s anything but a given. The ones who seem most content, however, understand the need to plan for the future but know how to enjoy themselves in the present. They might also be open and reflective enough to let go of the things they can’t control and change the things they can.
It also helps to work with an advisor who believes that balance is essential to the success of any long-term financial plan. To encourage this perspective, some advisors take a psychological approach to new client meetings, asking questions like “If money were no object, what would you do with your time each day?” or “What is your first memory dealing with money?” This way, clients can get help map out their road to future financial success and let themselves more fully enjoy the trip.