By Krista McBeath, McBeath Financial Group
Most of my clients will never realize how much detail and attention I put towards building their comprehensive financial plan. When I create these plans, as methodical as it is, it sometimes feels artistic in utilizing the right financial tools to paint a picture of their future that matches their vision.
Although the finished plan is beautiful in the sense that it can be foundational for their future, I’ve never had anyone publicly display their financial plan. You won’t see it as a coffee table book, framed and hanging with the hallway pictures, or even posted on social media.
That’s a ridiculous thought, right? After all, who posts about their financial status and plans? But, I’m sure you’ve seen people share things that are a result of their financial success. Have you ever been invited to a house warming party, had a friend drop by to show you their new car, or seen a friend’s Facebook post on a nice vacation with family? This isn’t bragging—it’s simply human nature to share life’s successes with the people you care about. My point is, it takes money to achieve some of these special milestones and it’s often a financial plan that is behind these ‘Kodak’ moments.
So what is a comprehensive financial plan, and how can it help people achieve more of the moments that are meaningful to them?
Comprehensive financial planning is about building wealth through a process, not a product.
Financial products are everywhere, and simply putting money into an investment product is not a gateway to getting rich, nor a solution to your financial issues.
Comprehensive financial planning is holistic.
It is about more than “money.” A comprehensive financial plan is not only built around your goals, but also around your core values. What matters most to you in life? How does your wealth relate to that? What should your wealth help you accomplish? What could it accomplish for others?
Comprehensive financial planning considers the entirety of your financial life.
Your assets, your liabilities, your taxes, your income, your business—these aspects of your financial life are never isolated from each other. Occasionally or frequently, they interrelate. Comprehensive financial planning recognizes this interrelation and takes a systematic, integrated approach toward improving your financial situation.
Comprehensive financial planning is long range.
It presents a strategy for the accumulation, maintenance, and eventual distribution of your wealth, in a written plan to be implemented and fine-tuned over time.
What makes this kind of planning so necessary?
If you aim to build and preserve wealth, you must play “defense” as well as “offense.” Too many people see building wealth only in terms of investing—you invest, you “make money,” and that is how you become rich.
That is only a small part of the story. The wealthy carefully plan to minimize their taxes and debts as well as adjust their wealth accumulation and wealth preservation tactics in accordance with their personal risk tolerance and changing market climates.
Basing decisions on a plan prevents destructive behaviors when markets turn unstable.
Quick decision-making may lead investors to buy high and sell low. And overall, investors lose ground by buying and selling too actively. Openfolio, a website which lets tens of thousands of investors compare the performance of their portfolios against portfolios of other investors, found that its average investor earned five percent in 2016. In contrast, the total return of the S&P 500 was nearly 12 percent. Why the difference? As CNBC noted, most of it could be chalked up to poor market timing and faulty stock picking. A comprehensive financial plan—and its long-range vision—helps to discourage this sort of behavior. At the same time, the plan—and the financial professional(s) who helped create it—can encourage the investor to stay the course.
A comprehensive financial plan is a collaboration and results in an ongoing relationship.
Since the plan is goal-based and values-rooted, both the investor and the financial professional involved have spent considerable time on its articulation. There are shared responsibilities between them. Trust strengthens as they live up to and follow through on those responsibilities. That continuing engagement promotes commitment and a view of success.
Think of a comprehensive financial plan as your compass.
Accordingly, the financial professional who works with you to craft and refine the plan can serve as your navigator on the journey toward your goals. The plan provides not only direction, but also an integrated strategy to try and better your overall financial life over time. As the years go by, this approach may do more than “make money” for you—it may help you to build and retain lifelong wealth.
Nobody wants a future filled with overdraft notices, handouts, minimum wage jobs in retirement, or grieving family members stuck with final expenses. Those are the things no one wants to talk about.
I think we all are seeking security and more of those magical moments for our family. Those times that are precious and worth sharing. Maybe it’s a Disney experience with the grandkids, savoring nice dinners out or even the satisfaction of supporting a cause you believe in. Whatever is dear to your heart that you want to remember, and to be remembered for.
The difference is in the planning. Maybe nobody will frame the comprehensive plan I create, but I have satisfaction, believing it’s right there, behind all of their great times ahead!
Maybe it’s time to draw up the picture of your own financial plan. Krista McBeath is an Investment Advisor, Chartered Financial Consultant, a Licensed Insurance Advisor, a Fiduciary, and an experienced tax advisor who specializes in financial planning, investments, and insurance. Phone 309-808-2224 or email firstname.lastname@example.org for appointment information. If you’re interested in seeing if she can help put your vision to a plan, make a small step and schedule a 15 minute introductory call to discover if it’s worth looking into.
Advisory services are offered through Landmark Wealth Management Inc, dba McBeath Financial Group, an Illinois Registered Investment Advisor firm. Insurance products and services are offered through McBeath Tax and Financial Services, LLC. McBeath Financial Group and McBeath Tax and Financial Services, LLC. are affiliated.