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Financial Planning: The Road to Success

By: Ted Black, CFP©
Spring 2024 (Vol. 42, No. 1)

As we’ve received a number of inquiries recently regarding the topic of Financial Planning, I thought I’d revisit an article we ran several years ago that outlined our approach to the process. Please keep in mind that Financial Planning is a personal journey and can mean different things to different people and different financial advisors, and as such, there is no “one-size-fits-all” approach. With that said, at its core, worthwhile Financial Planning should provide you with a solid understanding of your current personal financial situation, clearly define your financial goals, and help you protect yourself and your loved ones from catastrophic loss.

Whether you are just starting out in your professional life, in your prime earning years, or in retirement, a personalized game plan can create a solid foundation from which you can make informed decisions about your financial future and help you make the best use of your assets. The following is just a small sample of questions you might ask yourself as you’re preparing a Financial Plan: what is my monthly income and outflow?; what’s the value of my current investment holdings?; how much and how often am I contributing money to my investments?; when do I want to retire?; how much income will I need during retirement?; do I need life insurance, disability insurance, and if so, how much?; how do taxes come into play?

The scope of this article won’t allow us to explore all that’s involved in preparing a comprehensive Financial Plan, but please know that this process doesn’t have to be complicated, and can be very valuable. View this process as the financial equivalent of a thorough physical exam, with all the same benefits.

You can begin to put together a realistic look at your financial future by following a simple 4-step Financial Planning process.

Take Inventory – Understanding your current financial situation is an important first step. Gather all the documents, account statements, insurance policies, etc., that have any bearing on your financial life and take a “snapshot” of where you are today.

Clearly Identify Your Financial Goals – Be as specific as you can here, with realistic dollar amounts tied to a time line. The better defined your goals are, the better prepared you are to make decisions that give you the best chance to achieve them.

Create and Execute a Plan of Action – Armed with a solid understanding of your current financial situation and a clearly defined set of financial goals, now’s the all-important task of setting a course of action and executing your ideas.

Monitor and Adjust – Things change. There may be events in your personal life or in the marketplace that cause you to think differently about your financial future. Financial Planning is not a one-time event, it’s an ongoing process. Remaining alert and flexible will be a key to your long-term success.

Successful long-term investing starts with a solid plan. Taking the time to understand your current financial situation and clearly outlining your future goals is valuable information as you determine how to allocate your investments.

Try to keep it simple, and let common sense and the ideas and strategies recommended by IAS Financial be your guide along the way. And remember, view Financial Planning as an ongoing process, not a one-time event.

If you have questions regarding stocks and mutual funds, and how they can pertain to your Financial Plan, please call Ted Black, CFP® at 888-878-0001, extension 3.

Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.