Financial Planning Advice

If you want to enjoy a better level of financial security, good financial planning is essential. Knowing what to do with your money to get the best results and how to implement a solid planning strategy can be difficult, so it’s a good idea to employ the services of a financial advisor.

Advisors can offer guidance on any financial planning matter, with many of them specialising in a certain field. While you can find information about wealth management online or in books, getting qualified advice from someone in the financial services industry makes much more sense. You can’t always be sure that what you read online is up to date or entirely factual, so it’s better not to risk it.

Choosing a Financial Advisor
When looking to approach a financial advisor you should always make sure that they are regulated by the Financial Services Authority (in the UK), or the relevant authorising body in the country from which they operate. Using regulated financial advisors means that if something goes wrong, you have an avenue for an official complaints procedure and potentially even compensation. Always check the financial authority’s database of registered users before you commit to a product from any financial advisor or financial planning company.

Professional advisors are well trained and qualified to give you all of the most current planning advice across a wide range of areas. You might be looking for financial planning advice to help you set aside a lump sum to help you in the future. Your financial advisor will be able to tell you about the different products and services that you can use to ensure that your money is safe and well invested. They will discuss different options with you such as savings plans or lump sum and offshore investments – an independent advisor will be able to source products from across the whole marketplace ensuring that you get impartial advice with your best interests in mind.

Financial Planning For A Variety Of Purposes
Among the other financial planning matters that a professional advisor can help you with are things such as retirement and pension planning, education fees planning, life assurance/insurance and medical insurance policies. A good financial advisor will never try to force you to invest in something or purchase a specific product. If you feel that you are being pushed into a financial planning direction that doesn’t feel right for you, it may be a good idea to walk away and try to find a more reputable financial company to help you with your requirements.

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Why Financial Planning Is Important

Over the last few years, we often heard terms like financial planning, personal finance, investment management, retirement planning which have emerged as buzzwords of sorts. Newspapers, blogs, magazines, television channels and just about every one under the sun seem to be talking about the importance of financial planning. So what is financial planning; more importantly, why it is so important?

In simple words, Financial Planning (FP) is the process of meeting your life goals through the proper management of your finances. The process of financial planning should help you answer questions such as Where you are today, that is, your current personal balance sheet, where do you want to be tomorrow, that is, finances linked to your goals, and what you must do to get there, that is, what you must do to reach your goals.

The process involves gathering relevant financial information, setting life goals( such as children education, buying home, buying car) examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

Developing a financial plan needs a consideration of various factors. This includes client’s current financial status, their financial goals, any outstanding loan, investment instruments, insurance requirement, retirement corpus, inflation, risk profile, tax liability etc.

FP provides you with a method for organizing your financial future, so you can plan for the unforeseen. Organizing your finances empowers you to be independent and handle unpredictable events in your life. Successful personal financial planning is crucial for anyone who wishes to manage financial difficulties and accumulate wealth.

Coming to our main topic i.e. why it is important. Let us understand one by one.

1. It helps in increasing cash flow as well as monitoring the spending pattern. The cash flow is increased by undertaking measures such as tax planning, prudent spending and careful budgeting.

2. A proper financial estimate/plan that considers the income and expenditure of a person, helps in choosing the right investment policy. It enables the person to reach the set goals.

3. It helps gaining an understanding about the current financial position. Adjustments in an investment plan or evaluating a retirement scheme becomes easy for an individual with financial understanding.

4. Providing for your family’s financial security is an important part of the FP process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.

5. It helps you to achieve financial freedom.

6. To meet financial goals and obligation.

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The Power of Financial Planning

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” (Warren Buffet)

As a financial life planner, my underlying assumption is that planning is a “good” thing. Planning is widely acknowledged to be a pre-requisite for business success. However, Benjamin Franklin’s advice that “by failing to prepare, you are preparing to fail” frequently falls on deaf ears in the personal environment.

This is usually, in my experience, because people feel they have neither the time nor the skills for personal financial planning; nor do they want to spend money on hiring a professional financial planner. And a few people I have met have such confidence in their ability to make and retain significant fortunes that personal financial planning is deemed unnecessary, even spineless.

So this article is about why financial life planning is important. I will share with you some of the current approaches to planning, show you how to plan in practice and highlight the outcomes.antiquesinvestors anytimefunding appdealers appraisalanalyst approvedlawyers areavoip armdirectory armlenders artistmovie atlantisguide attorneybiographies automotiveserv automotiveservicesst automotr autoservicesst bodyhealth9 bodyhealth99 bornseller bowldirectory broadcastlisting broadcastrealtime broadjournal brokersquad buffalobakeries buyingtvs byemedia calendarpens ellustrate employeeverified employment101 equityinsiders espressotalk excecutiveseats excellentrewards execirseking extrainsider extremelaws ezscrapbooks familyconvention fantasticgrass faqexchange faxfarm featuredcard fedlocator fencingmart financeclass financecost financeservs financialacces findingimages findingturkey finestbling flashkeys flavorblog flexiblehold flexphones floorhours flowerstate footballcelebrations foreclosurecities formopinion forumtruth forwardcity fraternityfriends fraudpod freakymates fridgesearch frugaldate fruitlaw fullinsider funnytutor gravityadv10 gravityadvertising10 healthylifest healthylifest1 jiangkriktravel memorabiliapage memorabiliarecords mencritic menenzyme mensfederation mentorself metroflorists mitzvahblog mlsfile mobilecycles moldsearch momentummarket mommyapproved mommylesson monetizationinfo mortgagehole motionglobe movieevening movingjokes multisection namemovies namerecipe nameseizer nashvillelocations nbapayroll netinstitution newspaperconference newspaperpro newsscholar newstemps noinsuranceagent nomalpractice nomoratorium notebookessentials nowsavers nurseaction nycestate nyclocals offshoretravels oilkuwait onlybeverages onlyincentives onlyplates orthodeals owlville paidvalue paneljobs partyaccommodations paydayloane9 pensiontracker personaljokes pestalerts petsden petupdate phantomfund phonesbooks phoneyourself photoconference photographeremployment picsales plasticsurgeryparty podcrypt podpark poemwall pointzip pokeraddress popcowboy popjudge poppath pranksearch prepaidtelevision prepties preservefuel pressinterview printingalert prizeholdings processreport produceethanol programwire prospecttalk protectwrap publishapps pullcable purchasingbroker pushacross quakebot quarterreporter radiodiscussion raftingsales randomsearching ranktech rateddomain readycostumes recruitinglocal relayimage relayshow remoteshack repjournal reservationlounge residencerewards retaileralerts retromenu revenuemobile reversewish rhodeislandbargains roboage robojeep rougenation rvmortgage salonopenings saltlakecityflower sandwichmall sanjosebakeries satellitescreen sciencewireless scientificblackjack scificlubs scottsdalechurches scriptupdate scrubpoker seetennis seniorcommander seosavers sharedcustomer shopdrives shortleases simivalleyinfo sitterbiz sleepsaround smokingmask snowcities solarseason soloshower solutionlinks spainrates specialdisc splashtoy stagesinger stagesync stlouislighting stressmethods strictlypayroll stubagent studyodds stuffedcheese stylishtees stylistspace sundayrush superbapps surplusdirectory survivallesson survivaltests survivormart sweatmachines sweetfloss swimmingtub syndicatesearch tahoespace talkpays 2017mantap adventurebroker affiliatebee affordablepromotion affordablevaccines agentabuse agentpatrol amateurcredit analystbot analystexam anniversaryforum antihot auditnetonliness costumestyles euro-hostels1 financetips99 financialtipss financialtipss1 gamingwest gresiks heathlifes heathylifes9 hotelstravel kontonlngaceng kontonlngaceng9 lakidek lawsuitconsultant lawyerscredentials maleweekend managerassociates marketcities marketingadv marketingadvertise marketingstickers medbuilder medicationprovider megarush rambutanx skincustomize taxableequivalentyield travelbusinesstips traveltips9 virginiatouris9 whoseeker wifidiary wikiblast wilddorm wirelessdialog wirelessschedule womanjudge wordupdates workplaceevaluation workplacehistory worstclass wrestlingbeat

To plan, or not to plan?

I am passionate about planning because it leads to success. I recall my first sales job in financial services, cold calling to make appointments to sell insurance. I had an excellent manager who made me plan my target market, pitch, call strategy, everything. The first call I made was spot on, leading to an appointment in minutes. I knew it was going to work, my manager knew, my colleagues knew. And it did.

So why should we plan our lives and money? In my view, for four reasons:

1. To develop a practical framework for running household finances

2. To achieve profound goals as fast as possible

3. To ensure long term financial security

4. To deal with life’s setbacks

Lets look at each of these in turn.

1. Financial framework

Many people today lack a financial framework or system. When it comes to expenses, the core of financial planning, we often enter a fantasy world. Even if families can give a reasonably accurate set of current financial statements (assets, liabilities, income, expenditure and estate), they are rarely able to project what those statements will look like ten years, or even five years into the future.

Financial planners will usually tell you that clients come to them for these reasons:

‘We are not fully in control of our finances’
‘I don’t understand money; all I feel around money is fear and anxiety’
‘We don’t know where we are now or where we will be in the future’
‘We seem unable to live the lifestyle we aspire to’

When families do achieve clarity it usually provides great relief, even if the picture does not look good. They at least know where they stand and can take appropriate action.

2. Goals

Unfortunately, we live in an era where wealth is frequently generated for its own sake, rather than as the means to live a fulfilled life. Money is used to make more money – it becomes a proxy for the ego, and financial decisions are often made to protect or massage our egos, not to support the achievement of our deepest life goals.

Life and money are deeply intertwined. Identification of clear life goals is essential to provide direction, and enables sound financial decisions to be made. So when asked to comment on an investment someone is considering, I always pose another question: “Will investing in this product enable you to achieve your goals more quickly and efficiently?” Very often the answer is that it won’t.

3. Long-term security

The impact of increasing longevity on family finances is profoundly important. The keys to addressing this are the Three Drivers of Financial Freedom: savings, compound interest and asset allocation. While saving implies a reduction in spending, and potentially the hijacking of those important and immediate life goals, financial life planning can help to resolve these difficult conflicts between the short and long term.

4. Dealing with the unexpected

Life will have kicked you in the teeth in the past and it will do so again in the future. Accept it, and plan for it. Life can throw a huge range of fastballs at us, from the irritating yet not too serious car breakdown to the death of a close family member. Put in place contingency plans centred around a Security Fund and insurance. No one likes insurance (though I have yet to meet a widow who complained her husband was over insured).

Freedom

What you are really going to achieve from well-formulated goals and a structured, considered life and financial plan to achieve those goals can be clearly expressed in one word – freedom.

Freedom is a central theme of my work, so what exactly is it? True freedom comes from defining and setting boundaries and living a life dedicated to achieving your goals within those boundaries. Greater freedom comes from personal growth, the means by which we can expand our boundaries.

Lianne’s story illustrates this perfectly. A mother of two on a modest salary, Lianne had gone through a difficult divorce and when she first came to me for help, she was consoling herself with a compulsive spending habit.

However, her goals were to love, support and educate her children and to be a really good mother to them to compensate for the breakdown of the marriage. I worked with her to plan her boundaries. We established her life goals, tackled her spending and developed an annual spending plan.

One Monday morning she called me to talk about her weekend. She had taken the girls to London to see a concert and had done so without any feelings of guilt or anxiety over money. It had been in her plan. She had achieved her goal of bringing happiness and fun to her children. Within her boundaries she had achieved real freedom, to be there in the moment with her children, simply to be.

It’s the process that matters

Plans rarely survive contact with reality, to misquote Moltke. Reality for many of us can cause a change of direction. However, the process of planning is as much a benefit as the plan itself, often more so.

There are a number of planning processes around, often developed by professional bodies such as the Financial Planning Association or the Kinder Institute in the US or the Institute of Financial Planning in the UK. My own process is a six-stage process for called FUTURE:

Foundation: a full inventory and analysis of your life, including assumptions and an analysis of your risk profile
Utopia: establishing what you want to have, to do, to be
Transformation: identifying and dealing with the obstructions on the road to utopia
Utilisation of resources: establishing the best option for your existing resources
Roadmap: creating the plan to get you from where you are now to where you want to be
Execution: implementing and living the plan

Having developed a plan it is important that you continue to monitor and renew the plan each year. Planning is dynamic, a habit, not just a couple of sheets of paper to be drawn up then relegated to the bottom draw and forgotten.

The fruits of the process

We all in the financial community trust our processes, because we know they bring results, results that are more than just a written plan.

Initially you will develop a personal inventory of your life. This will include a detailed set of accurate financial statements comprising a schedule of assets, liabilities, income and expenditure, as well as data about yourself and the environments you inhabit.

Self-understanding builds on this base and by the time you are well into the process you should be able to articulate your deepest and most profound goals. In doing so, you will find yourself energised, focused and far sighted.

Finally, you will learn about money. If you are working with a coach or adviser you will have a raft of financial principles and products explained to you. If you are alone on this journey you will need to educate yourself, and there are plenty of resources out there to help.

What is the alternative to planning? Well, you can wing it; with a good deal of chutzpah, a hefty dose of confidence, a wing and a prayer and a bit of carpe diem you might well achieve great things, and get a real thrill and sense of achievement when you do. However, I do believe in the importance of living in the moment. The present is where we can really ‘be’. Crucially, financial life planning will actually help you to achieve this state by removing regrets for the past and fears of the future.

A well-structured plan will give you a thorough understanding of your situation and ensure you always have the right money in the right place at the right time to achieve your deepest life goals.

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