Sometimes it is easier to start with what something is not to bring greater clarity to what something is.
A financial plan is not a graph showing the growth of your assets given different investments and what they theoretically might be worth at a given date in the future. Certainly, a financial plan incorporates such extrapolation, but it is not in and of itself such a prediction.
A financial plan is not a fancy book, leather bound and containing fancy graphs and predictions. You can put that on the bookshelf, but it does not make the plan more special.
A financial plan is not a one-time prediction about your probability of success. We could run that report and it gives us an idea of where you are today. But if we left it there it would be worth less next year because the conditions on which the predictions are based change all the time.
No, a financial plan is not any of these things. Some companies give you exactly these things and claim to be doing financial planning. It does a disservice to our profession and mostly, to you as the consumer.
A financial plan is at its very core a living, breathing and forever changing financial condition representing all the wonderful things that are you, your family and those who are important to your life. Your goals, hopes, aspirations and dreams all wrapped up in an analysis which will forever be on the move. It is a process of adapting to your evolving needs and coaching you through the span of time.
Here at TenBridge, we not only practice financial planning, but we also breathe it every day. Everything we do is wrapped around the one essential very important idea: we need to understand your entire picture and have a plan to help you navigate your future and financial life. Without it, we would only be giving advice in a vacuum.
As consumers we make decisions based on emotions and it is our primary filter. Our decisions rarely go through any different channels. It is our gut, our reaction, our visceral thoughts regarding the best path forward. The most important and by far hardest part of financial planning is navigating this filter and having a strong understanding of who you are as a person.
It is the careful marriage of you to the financial plan which makes all the difference in the world. Some research suggests it is the most critical component by far because when we make decisions or pick paths, without considering you as a person, you are much more likely to not stick with the strategy.
Beware the salesperson who tries to sell you an investment strategy report or product pitch disguised under the label of a financial plan or the advisor who gives you advice without taking your entire picture into consideration. There is a better way. True financial planning is the path, and we can help.
From the desk of Erik Lawrence CFP®