People often think of wealth as accumulation of money and material possessions, along with legacy and impact. But true wealth encompasses so much more than money; it’s about health, family, friends, experiences, fulfilling work, community, and time freedom. So, how do you achieve wealth? Knowledgeable investors utilize comprehensive financial planning with the help from a fiduciary financial advisors.
What is Comprehensive Financial Planning?
Comprehensive financial planning is a holistic process
Every aspect of your financial life is taken into consideration during the financial planning process. This can include things like your cash flow, spending habits, tax strategies and retirement goals, but also examines your relationship with money, your core values, your tolerance for risk, and the many other emotions associated with making financial decisions. It also encompasses things like:
- Estate Planning
- Retirement Planning
- Tax Strategies
- Investment Strategies
- Education Planning
Creating a long-term relationship with a fiduciary and fee-only financial advisor is the best way to put a comprehensive financial plan in place.
Allan Slider, founder of FeeOnlyNetwork.com
Comprehensive financial planning provides clarity:
Having a vague idea of what you want your future to look like, and articulating and envisioning specific goals are two very different things. Comprehensive financial planning helps to bridge the gap between intangible wishes and concrete objectives. Whether your goal is to purchase your first home, pay off debt, start a business, buy a vacation home, retire early, or leave a legacy, a comprehensive financial plan can help you discover your version of financial freedom. It helps you clarify your specific short-term and long-term goals and then creates a unique roadmap for you to follow on your journey toward achieving them.
Comprehensive financial planning is dynamic:
The goals you set for yourself now have a way of changing over time, and you can bet that something unexpected will happen during your lifetime (like a pandemic, for instance). Comprehensive financial plans are adaptable to life’s unpredictable moments. They prepare you for the unexpected, and account for things beyond your control like inflation, market turbulence, or a sudden job loss.
Comprehensive financial planning is most effective with an unbiased and experienced guide:
Not all financial guides are created equal, and it’s important to know the difference in who they are, how they are paid, and who they work for. A fee-only financial advisor works only for you, is paid by you directly, and must adhere to a fiduciary promise – which means they vow to always put your best interests ahead of their own. Advisors who are fee-based or commission-based come with an inherent conflict of interest. They are paid to push certain products, they typically work for big name hedge funds, and they are not required to put your best interests first. Partnering with an experienced, fee-only advisor is the only way to obtain an unbiased comprehensive financial plan.
What ISN’T Comprehensive Financial Planning?
Comprehensive financial planning is NOT a quick fix:
A thorough, holistic financial plan takes time and effort. It can include things like data and document gathering, and in-depth discussions surrounding your assets, expenses, goals, risk tolerance, and time horizon. It is a process that typically takes anywhere from a few weeks to a few months to prepare, and may even require revisions. Like most things in life, there is no “quick fix” when it comes to your financial freedom.
Comprehensive financial planning is NOT one-size fits all:
In the same way that your neighbors’ stringent diet and exercise regimen may not work for you and your lifestyle, their comprehensive financial plan won’t align with your financial situation and goals. Fee-only advisors tailor each comprehensive plan to each client’s individual needs.
Comprehensive financial planning is NOT a product:
Some financial advisors push alluring products that promise to produce wealth. But true wealth does not happen overnight, and it doesn’t happen with a “magic” investment. Comprehensive planning is a process, achieved over time, not through a product.
Comprehensive financial planning is NOT “set it and forget it”:
Comprehensive financial planning is an active approach. It is not a one-time “set it and forget it” task. Whenever there is money in motion, you will want to update your financial plan. This can include a job change, a change in your tax situation, lifestyle changes, and even personal development – like getting married or having a child. Your life changes and transitions have endless repercussions on your financial plan. That’s why it’s important to partner with a financial guide that you trust, are comfortable with, and that works in your best interest all of the time.
The Takeaway
Comprehensive financial planning is not just about numbers and spreadsheets; it’s about empowering yourself to take control of your financial future. It’s a strategic roadmap, drawn just for you by an unbiased guide, that points you toward your financial goals, whether that involves buying a home, saving for retirement, preparing for the unexpected, or achieving a lifelong dream. By understanding your unique circ*mstances, setting clear objectives, and regularly reviewing and adjusting your plan, you can navigate life’s financial challenges with confidence. Remember, your financial journey is a marathon, not a sprint, and comprehensive financial planning is your trusted companion along the way, helping you achieve the financial security and peace of mind. So, embrace the power and process of comprehensive financial planning and take the first step toward a brighter and more secure tomorrow.
