If you don’t design your own life plan, chances are you’ll fall into someone else’s, and guess what they have planned for you? Not much.
– Jim Rohn
Financial planning should not be confused with making an investment in your retirement account or buying life insurance to protect your family. Financial planning involves creating strategies to help you better manage your financial resources so that you can achieve the goals you have.
To ensure a thorough analysis and a full understanding of your current financial situation, you will want to ask your financial planner to review the MyWealth Records binder and follow up with you for answers to any questions they may have. Once your financial planner has a clear understanding of your values, intentions, and goals for your wealth, they should be fully prepared to create an integrated financial analysis, or Big Picture, complete with projections and forecasts. Typically, your financial planner will do this using professional-grade financial planning software that is designed to provide answers to the most common questions people have about their goals and finances:
- Are my goals realistic based on my current income?
- Where should I invest based on the goals I have?
- How much of my income do I need to contribute to my goals?
- What is the one thing I should focus on accomplishing first?
Starting with the above questions enables you to examine your financial situation in relation to your goals. This will help you and your financial planner to better understand which aspects of your financial situation may need focus in the short, mid, and long term, and help to clarify the following four questions:
- Do my financial goals align with how I manage my money?
- Does my current lifestyle support my primary financial goals?
- Are the fees I pay on my investments in line with the advice provided to me?
- What is the best use of the money I have available today?
RECORD TYPE: Goals and Objectives
When setting goals, many people think the most important thing to remember is to keep them realistic and attainable. While your goals should be realistic and attainable, they should also be ambitious and challenging.
Your goals have the power of unlimited potential, but to harness that power, you will need to develop supporting objectives and establish key results that are specific and time-bound. The more careful you are at defining your goals and setting objectives, the more likely you are to do the things needed to achieve your desires. Having well thought-out goals and objectives is an important part of managing your wealth.
Suggested Action: Complete the Goal Checklist included with this record. Once you have selected several goals, use the Goal Planning Worksheet to describe each one in greater detail.
RECORD TYPE: Financial Projections
Financial projections are used in the financial planning process to identify obstacles that may prevent you from achieving your goals. Usually included as part of your financial plan, they consist of concepts and product illustrations designed to validate the recommendations made by your advisor.
Suggested Action: Add copies of your Financial Plan, along with any Sales Concepts and Product Illustrations provided by your financial planner and/or other advisors.
RECORD TYPE: Recommendations
Recommendations are made to help you achieve the goals you have and can include lifestyle changes, strategic actions, and products that will improve your financial situation. Regardless of the type of planning you are doing, the Financial Review Checklist is a simple yet powerful tool that helps your advisor identify any areas of concern that may prevent you from achieving your goals and the next steps you should take.
Suggested Action: Add copies of all written recommendations and suggested next steps that your financial advisors give you. You will be able to refer to them in the future, and your family will understand the plans you have made.