Introducing the Financial Blueprint

One of the key skills of a good financial planner is to simplify thoughts to the most basic concept, yet still achieve the desired result. Over many years and thousands of conversations with clients and other individuals, I built up in my mind my perfect strategy for clients, my Blueprint if you like, that will help everyone achieve their desired financial success – or Happy Place.

I normally only share this with my clients, many of whom pay thousands of pounds to go through our full onboarding process. I have never published this Blueprint on any blog or newsletter or website because it is my intellectual capital, however I now feel this model is so powerful that it is worth sharing with everyone through this book.

The key with the Financial Blueprint is that it is a visual model. The reason for this is that the human mind is far better at thinking logically with pictures. “A picture is worth a thousand words” has never been truer, especially when trying to explain potentially complex topics and concepts with many different parts.

The concept of the model is that also it is interlocking and interdependent. It is almost impossible to achieve the ultimate outcomes without doing all the underlying specific tasks first. The good news however, is that each task is specific and I will show you how to do it.

Now remember back to an earlier newsletter and the iceberg? How do most people think a financial plan should start? Most people – and frankly most financial planners – will say, “Well, first you should look at your investments, then your pensions etc., etc.” Wrong! Your plan, your life should be all about achieving your Happy Place – remember this is a Plan For Happy. Every plan needs to start with the destination otherwise it is essentially useless and your money should be made and structured to help you achieve this – so this is where we begin.

To get to that Happy Place we must achieve three main outcomes.

1.?????????????????? Full visibility of your financial situation today and in the future. You have to know where you are and where you’re going.

2.?????????????????? An optimised investment strategy that is designed specifically for you, taking into account the split of your assets between long and short-term as well as your comfort level with risk and volatility.

3.?????????????????? Maximise your wealth, no matter what level you’re starting at. To maximise your wealth we need to make sure that we are taking specific actions each year, no matter what markets are looking like, that are planned to be tax-efficient and all accumulate to build that long-term wealth.

As the model begins to come together now you can see we arrive at the building blocks stage. To achieve the desired outcomes I mentioned above, we need to have the three basics of any good financial plan – Planning, Saving and Investing.

For most people, they don’t have a financial plan and many live pay-cheque to pay-cheque. I don’t need to explain any more how unsustainable that is for building wealth. Using this financial blueprint to build a detailed financial plan, my aim is to get you from a mess of papers to mastery of your finances.

Saving is really the crux of building any wealth as you cannot grow assets if you’re spending all of them. By following our savings plan outlined in the rest of this book, I am looking to take you from profligate to prudent without taking the fun out of life.

And finally investing, making your money work hard for you and grow over time, can be perceived as risky and confusing. My role is to demystify investments and financial markets and show how you can use the concepts of time and risk to your advantage when investing. From clueless to confident in investing.

Now we have the basic blueprint in place. You can hopefully start to see how all the different factors work together to achieve the outcomes and ultimately towards our Happy Place.

But we’re not done yet.

For each of the building blocks – Plan, Save, Invest – there are three specific tasks or “accelerators” that I call them, that you need to do to achieve your outcomes. Don’t worry, I will explain each clearly over the rest of the book – they each have a dedicated chapter – so you’ll know exactly the steps to take and why you’re doing it.

For the Plan, we are going to do the following:

1.?????? Set goals.

2.?????? Calculate trajectory.

3.?????? Consider retirement.

When we are thinking about how to Save, we will:

1.?????????????????? Understand spending.

2.?????????????????? Start savings pots.

3.?????????????????? Increase monthly surplus.

And finally, thinking about how to Invest, we will:

1.?????????????????? Build knowledge.

2.?????????????????? Construct the investment strategy.

3.?????????????????? Put the plan into action.

This is your Financial Blueprint.

This is the map to achieving your financial Happy Place.

As you achieve each of the accelerators around the outside, you are getting closer and closer to achieving each outcome, which in turn works towards achieving the ultimate Happy Place. I would encourage you to print this page off (you can find a PDF on the website www.adamwalkom.com ) and tick off each accelerator as you work around the blueprint.

How do you score today?

As an exercise to begin, look at each of these accelerators around the outside – all nine of them. Then consider where you are today for each of them and give yourself a ranking out of ten. Be honest with yourself. Let’s go through them with a bit more explanation to help you score yourself honestly.

Plan

1.?????? Set goals – How clearly have you defined future goals? Do you know where your headed? Do you have short, medium and long-term goals in place?

2.?????? Calculate trajectory – How do you know if you’re on track for those goals? Do you keep a spreadsheet of investments and/or spending and income?

3.?????? Consider retirement – How much have you thought about what your retirement looks like? Do have a strong idea of when and how you stop working? Or you may even not stop?

Save

4.?????? Understand spending – How well do you know how much you spend each month or year? Have you split it out into categories? Do you know the difference between your discretionary and non-discretionary spending?

5.?????? Start savings pots – Do you have savings pots set-up? Are they split out for different goals and/or scenarios? Do you have a rainy-day fund?

6.?????? Increase monthly surplus – Have you thought about ways to increase your monthly surplus? Have you taken active steps to reduce your spending? Are you pursuing ideas to increase your income?

Invest

7.?????? Build knowledge – How is your knowledge of investment markets? Do you know what the key drivers of investment performance are for you? How comfortable are you with “risk” and do you think about how you can best use it for your situation?

8.?????? Construct the investment strategy – Have you thought about your investment strategy? Have you split out the strategy into different timeline or goal scenarios? Do you take particular risks with different particular pots? Do you use low-cost index tracker funds?

9.?????? Put the plan into action – Do you have an investment strategy in place? Have you consolidated your pensions into one easy-to-use place? Do you use your ISA allowance each year? Are you being tax effective with your pension? Do you use low-cost index tracker funds?

Remember, give yourself a score out of ten for each. Don’t worry, nobody else needs to know. Now total up the scores.

If you scored anything >40: Amazing, you have a big head-start and are well on the way.

If you scored between 20 and 40: Great: There are already some positives there but there is lots of work to be done.

If you scored <20: Fantastic. Now you realise how valuable this Blueprint is in terms of improving your situation.

After finishing the book, there should be no reason why you wouldn’t mark yourself 10 for each accelerator.

You will have a well-designed financial plan that builds towards your ultimate goal. You will have a detailed savings plan that will build your wealth in a relatively painless way and finally you will have a specific investment strategy, designed just for you.

Imagine how that feels? That feeling you had just then, that is your Happy Place. That is what we’re aiming to achieve together.

Now, lets’ get started.