I believe without a doubt that financial planning is the key to having peace of mind about your finances.
Having a plan in place helps you stay calmer when markets go haywire. A plan also enables you to focus less on what return you’re getting.
Instead, your focus is more on how your progress towards the goals you set in your plan.
Most people find it refreshing and tell me it helps eliminate worry about what’s happening in the day-to-day ups and downs of the market.
The financial planning process
Every client’s situation is different. Creating a plan is not a one size fits all endeavor. Our first meeting is to take the time to get to know each other and for me to understand the things that are most important to you.
Conversely, I also want to know what keeps you up at night. Is it worrying about running out of money? Are you strapped with debt (credit card, student loan, cars, etc.) and concerned how to pay it off? Are you concerned about setting up and managing a budget? About how to manage your investments more effectively? Worries you may not have enough money to retire when you want?
These are all things we want to clarify and understand.
We do that by adhering to the following process.
The discovery meeting is often done on the phone or in an online session. I work with clients all over the country. Virtual meetings are the most common and most effective way to meet.
The discovery meeting will be different than most anything you’ve done in the past. The time we spend together isn’t about filling out some forms to list your assets and liabilities. It doesn’t involve a 3 to 4 question”risk tolerance questionnaire that supposedly determines your capacity for risk.
Here are a few of the things I want you to answer in our time together.
- Why is money is essential to you? That may seem obvious and counterintuitive. You’d be surprised how few people struggle to answer the question.
- What do you want your money to do for you?
- Which relationships in your life are important to you.
- Do you want to leave a legacy? If so, what kind of legacy?
That’s a small sample of the questions. The discovery meeting lasts from sixty to ninety minutes. I’ll create a summary (reasonably detailed) of our discussion to review at our next meeting.
Any investment, to achieve long-term success, must be tied to the goals you are trying to reach. In this planning stage, we begin working on your plan. We analyze whether what you are currently doing will get you to where you want to be. We will identify any gaps that may exist and offer solutions to close those gaps.
I use a reasonably sophisticated planning tool to walk us through the numbers. The planning phase is interactive.
We will enter the data together and link up all your investment accounts. In addition to your personal investment accounts, we will connect your employer retirement plans as well.
The planning process is just that – a process. It shouldn’t be a one-time event. However, you can sign up for the basic plan, and I’ll work with you to map out your goals and leave it to you to implement any recommendations. You can sign up for an annual review for a flat fee. You can also choose an ongoing monthly (or quarterly) subscription service to have access to your plan throughout the year.
I chose this planning tool because it allows me to offer multiple levels of planning to suit your specific needs.
If you choose an ongoing plan, here’s the next step.
You will get a written action plan to help you implement the recommendations we agreed on in your planning. In the basic program, you will apply the recommendations yourself.
If you choose the comprehensive plan, I will work with you to put the recommendations in place.
Remember, planning is dynamic. Plans often change based on unexpected things that happen in life. Job change, divorce (hopefully not!), marriage, having children, sending children to college, and many other life events alter your initial plan.
Which brings us to the final phase of the process.
Whether we work together or you implement on your own, it’s important to understand that planning is not a set it and forget it proposition. For the reasons mentioned in the implementation discussion, you need to revisit the plan when changes warrant.
The comprehensive planning package includes ongoing monitoring.
If you want me to take care of managing your investments, I will do that under a separate investment management agreement. You can see the fees for that on the pricing page.
Whether you work with me or someone else, please don’t skip the planning phase.
5 Things You Can Do With an IRA That You Can't With a 401(k)
You can do a lot with retirement plans, both employer (401(k)s) and personal (IRAs). That said, IRAs have options that employer plans don't. Enter your mail address and I'll send you a PDF that shows you 5 things you can do with an IRA you can't with a 401(k).