Achieve financial freedom in the most effective way!
What’s your definition of financial planning? Ask any group of people this question and most likely each person will answer differently. The truth is, they may all be right because financial planning is very personal and also complex. No financial prescription fits all people, therefore definitions vary.
The secret to success in personal financial planning is determining what you want to achieve first and then figuring out what it’s going to take to achieve that. Create your personal definition – for many, it is simply an expression of what financial freedom means to them. Before you do, buy or plan anything, you should ask yourself why—and whether you are meeting the standards you have set for yourself and your family. Identify what your family’s dreams might be and start planning together to make them happen.
Once you outline your goals and identify your definition, you need to know how to get there. To get there successfully you have a choice to make in securing your financial freedom. You could go at it alone or choose a professional team. Before you go at your financial planning on your own, ask yourself the following questions:
- How has that worked out so far?
- Am I truly the best qualified person to be responsible for understanding all the implications of each decision?
- Is becoming educated on all the jargon something I am passionate about – or even interested in?
Many will most likely seek the professional help of an expert team. Delegation of your financial planning isn’t a completely hands-off approach. You still need to be committed and involved. To guide your team well, you should know some basics.
Start by addressing The 6 Big Risks® that are a critical part of any comprehensive financial plan. Personal financial planning should consider the concepts of Living Too Long, Dying Too Soon, Becoming Sick or Injured, Improper Tax Planning, and Legal Entanglements. Above all else, make sure that financial planning includes a Coordinated Plan.
The biggest risk you face is an uncoordinated financial planning. In other words, no one on the team is talking to one another. Does your risk management specialist know what your asset manager is recommending or has the tax strategy recommended by your CPA been vetted with your attorney. Is any of this in alignment with your personal financial planning, goals, or personal definition of financial freedom?
Make sure that someone is the orchestra conductor of your financial freedom and that everyone on the team is playing the same tune! Understanding these risks will help you plan ahead and plan for living your ideal life the ultimate financial freedom!