The Checkup Issue 7
Welcome back readers! I hope you are all enjoying the beautiful fall weather. In our home, as soon as we flip the calendar to October, we start to celebrate “Spooky†season. In anticipation of Halloween, throughout the month of October, my wife and I enjoy watching all our favorite classic horror films and usually find a few new thrillers and horror films to watch. Then we usually end the festivities by getting dressed up in costumes and attending a fun Halloween party with friends.
However you choose to celebrate Halloween this month, whether It’s taking your kids trick-or-treating, going on a haunted hay ride, or simply indulging in some classic horror films, I’d like to suggest adding in another October tradition. Consider reviewing your finances because October is not only Halloween but also Financial Planning Month!
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In this month’s newsletter, we will break down what a financial plan is and why you should consider implementing one. My hope is that after reading this post, you will take some practical steps to make your finances less spooky.
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What is a Financial Plan?
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I’d like to start by demystifying financial plans. As advisors, myself included, one aspect of our business that we have a lot of room for improvement in is explaining what it is that we do. We can get carried away with technical terms instead of explaining things clearly for people to understand. So, if you have ever seen or heard the phrase “Holistic- comprehensive financial planning,†that just means a plan that takes every aspect of your financial life into account.
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At its core, a financial plan is a written document that gives a big-picture view of your financial situation, current and future goals, and the strategies you’ll use to achieve those goals. It’s a roadmap for your financial journey that will evolve over time and is tailored to your unique circumstances and aspirations.
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A good financial plan typically includes:
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1.?? Personal Information: Details about your age, family status, and employment.
2.?? Goals and Objectives: Everything from buying a house, funding children's education, to retirement.
3.?? Assets and Liabilities: An inventory of what you own and what you owe.
4.?? Income and Expenses: A breakdown of your cash flow.
5.?? Investment Strategy: How you plan to grow your money.
6.?? Risk Management: Insurance needs and estate planning.
7.?? Tax Planning: Strategies to reduce tax liabilities.
8.?? Retirement Planning: How you plan to sustain yourself once you stop working.
9.?? Recommendations and Reviews: Adjustments and fine-tuning over time.
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Why you should consider a written plan
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1.?? Increased confidence: A formal, written financial plan vastly enhances people’s confidence in being able to retire well. According to a study done by a financial research institution, half of people ages 55-75 who have a formal retirement plan feel very prepared for retirement, compared to only 17% of those who do not have a plan.
2.?? Clear Vision of Finances: Most people live very busy and hectic lives. As a result, our finances follow the trend and get unorganized. Many people don’t have a complete understanding of their financial picture. A financial plan forces you to get a detailed look, which in turn helps in making informed decisions.
3.?? Establishing Financial Goals: Defining your financial goals, be it short-term like buying a car, or long-term like retirement, is the first step towards achieving them. With a plan in place, these goals become more concrete, motivating you to work towards them.
4.?? Creating a Roadmap: Knowing what you want is one thing; knowing how to get there is another. A financial plan provides the steps and strategies to achieve your goals.
5.?? Risk management: Life is unpredictable. Financial planning helps you anticipate and prepare for potential risks, such as sudden illnesses or job losses, ensuring you and your loved ones remain secure.
6.?? Making Money Work: With a clear investment strategy, you can optimize returns on your savings and investments, leading to wealth growth over time.
7.?? Achieving Peace of Mind: Knowing that you have a strategy to handle future uncertainties, be they market downturns or personal emergencies, offers peace of mind.
8.?? Adaptability: A financial plan isn’t set in stone. As life circumstances change- like new jobs, births, or unexpected expenses- the plan can be adjusted. This adaptability ensures you always stay on track.
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Check Up
领英推è
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When was the last time that you wrote down your life and financial goals? I encourage you to take some time to write down two goals that you can start working towards this month: one financial goal and one life goal.
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Final Thoughts
Financial planning isn’t just about counting pennies; it’s about crafting a vision for your life and then using your resources wisely to make that vision a reality. By organizing your finances, understanding your goals, and having a roadmap to achieve them, you’re setting yourself - and potentially your family- up for a future that’s not only secure but also filled with realized dreams and ambitions.
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Offer
Financial planning can seem overwhelming, but it doesn’t have to be. If you would like to take the next step on your financial journey and want assistance with writing a formal plan, I’m here to help! Message me “Plan†to receive a complimentary one-page financial plan. After a phone call or meeting to better understand your goals and explain our financial planning process, we will work together to craft a plan that you can walk away with and implement right away.
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Economy
- ?September CPI: 3.7%
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The Consumer Price Index (CPI) report was released yesterday.
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The report showed that the cost of U.S. goods and services stayed flat in September with a rate of 3.7% (the same as last month). The report was still hotter than anticipated.
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- Shelter is still a main factor that is driving inflation.
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How did the market handle the news? Pretty negatively. Stocks ended the day in the red. Bonds came off their previous lows.
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Why does this matter? Inflation isn’t getting worse, but it’s still too high and could affect the Fed’s decision on interest rates next month.
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Stocks
?DOW: 33,631 (-0.51%)
S&P: 4,349 (-0.62%)
NASDAQ: 13,574 (-0.63%)
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*stock prices as of market close on 10/12/23
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Did you enjoy this month’s issues? Share with a co-worker or friend!
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Disclosure: Investing involves risk. Depending on the different types of investments there may be varying degrees of risk. Socially responsible investing does not guarantee any amount of success. Clients and prospective clients should be prepared to bear investment loss including loss of original principal. The strategies and topics discussed in this issue do not assure profit or protect against loss.
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