Financial planning explained
Here’s some good news: you can positively affect your level of economic success by planning for your future instead of “winging” it. Without a goal, and a plan to get there, people usually spend years chasing short-term objectives while their long-term objectives get farther away.
Financial Planning: Closing In On Retirement
Most of the people who have come to us for a financial plan are getting very close to retirement. They want to know:
• If they can retire,and when to start financial planning
• When they can retire and
• If they can live in the style to which they are accustomed.
But waiting until retirement is just around the corner leaves little time to make corrections. The ideal time to create a financial plan is when you’re young.
Financial Planning: Roadmapping
A financial plan is like a roadmap. It’s a map in time instead of space. Like a road trip, there are places you want to stop along the way, and a destination you want to reach. The stops along the way may be marriage, a home, college for the kids, cars, vacations or starting your own business. The destination may be retirement or leaving a legacy.
Along the route there are hazards to contend with: financial risks, illness, disability or even death.
Financial planning forces you to focus on the things you can control – like earning and saving – and understand that part of the future is outside of your control. It can point out ways to protect against risks that are outside your control.
A plan will identify resources you will need to reach your objectives; the professional advisors who will help you with the legal issues and determine who will provide the financial guidance you will require. A plan will even guide your beneficiaries and heirs once you are gone.
A plan does not execute itself. Like a map, you need to check it from time to time to make sure you are on the right road.
And, if you make the wrong turn and get lost, you need to be able to stop and ask directions. This is where a financial planner, the one who helped you set up your plan in the first place, is the right person to ask.
Financial Planning: Protect Against Risks
Arie and Stephen Korving are both CFP™ (CERTIFIED FINANCIAL PLANNER™) Practitioners. To find out more about Financial Planning and what it can do for you, call us for a free consultation.