There are many famous quotes about financial success, but one of the best comes from the late French author Antoine de Saint-Exupery. “A goal without a plan,” he said, “is just a wish.”
From where I sit, Saint-Exupery couldn’t be more right. Over the years, I’ve seen how clear, solid plans have allowed my clients to take control of their futures and accomplish their goals.
With the year still new, this is a perfect time to get serious about reaching your long-term goals by creating a financial plan. Financial plans work the same way a roadmap does: They allow you to make steady progress toward your destination rather than driving in circles.
Financial planning need not wait until you have enough wealth to afford everything you want. Planning, in fact, is what helps you to achieve that wealth. In a nutshell, financial planning helps you to:
- Evaluate your current situation. How many of us really understand where we stand financially? How do our assets compare with our debts? Are we saving enough of our income? And if the unexpected were to happen, would our families be financially secure or would they end up in crisis? A qualified financial planner works with you to eliminate guesswork and provide a clear picture of where you stand.
- Sharpen your goals. Everyone has goals—retirement, college funding, real estate, travel—but in Saint-Exupery’s words, they’re usually just vague wishes. If goals aren’t brought into focus, the means to achieve them can slip away over time. Financial planning commits you to being specific, and it puts a realistic price tag on your goals. This allows you to make clear, informed choices. And remember, you can always modify your goals down the road if you wish.
- Make progress toward your goals. A good financial plan lays out exactly what you must do in order to fund your future goals. Once a plan is in place, energy once spent on wondering and worrying can be put to work carrying out your plan.
- Invest with purpose. Investments without a plan are like a boat without a rudder. Your financial plan helps you understand how you should invest based on your unique goals, the time you have to accomplish them and your comfort level with risk. Over the years, your plan will serve as a yardstick for your success. After all, the goal of investing should be to achieve the safe growth needed to help meet your own goals, not to beat your neighbor’s returns.
- Plan your estate. One of the biggest question marks for many of us is what happens when we’re gone or incapacitated. Who will have the power to make medical decisions on our behalf? How will our assets be distributed? Who will have the legal power to care for our dependents? A comprehensive estate plan allows you to provide the answers right now rather than leaving them to chance later on.
Remember that financial plans should be reviewed and updated over the years as necessary. After all, time can change our goals, our tolerance for risk and our career or personal situations.
