Can you be successful without a financial plan? Of course! The question is not whether a financial plan is the only way to achieve success, but how much more success is possible when you implement a plan.
Imagine you own a high-end antique store. You offer unique and beautiful pieces and have a loyal customer base. With a keen understanding of the market and your product, you can make a steady profit, but without a financial plan, you can easily stagnate.
A financial plan helps you highlight exactly which items deliver the highest margin and sell at the highest volume. Trends are visible at a glance. A plan allows you to always know the exact amount you can invest in new products and which ones to choose to get the most out of your business.
People often imagine they’ll save more money as their income grows, only to discover expenses easily keep pace with any increases. No matter how much you earn through
income, businesses, and investments, the pathway to greater wealth is the effective use of what you generate.
This article will help you understand a method for customizing your financial plan, which is vital for success:
- Discover your financial needs
- Design a customized wealth map
- Deliver progress through adaptive monitoring
What is Customized Financial Planning?
A customized financial plan takes a holistic approach to your financial life. It starts with you as the client. As holistic financial advisors, we don’t just look at your current financial circumstances. We start by discovering who you are.
The first step in a customized financial plan is identifying the real-life experiences you want to create through building wealth. Whether that is travel, a bigger home, paying for your kids’ or grandkids’ education, enjoying a comfortable retirement, or leaving a legacy, starting with your meaningful goals helps your advisor craft an investment strategy that builds the life you want for yourself and your family.
Once you’ve identified why you are investing and the meaningful life goals you will achieve through investing, you and your financial advisor are ready to begin designing a strategy to fit you and your goals. In this second stage, you dive into the specifics of your finances, your investment history, and how we can help you improve results moving forward.
One of the advantages of customized financial planning for investors is that it will never apply a cookie-cutter approach. Instead, we build a holistic, systematic strategy from your meaningful life goals. Our planning process is intensive and iterative.
Once your plan is designed, the real, long-term process is just beginning. At Brown | Miller, our team is proactive. We keep in touch with our clients to ensure we are evolving your investment portfolio, insurance plan, tax strategy, and estate plan to keep pace with market changes and your life. We implement each step of the plan.
With frequent monitoring and reviewing, we help keep you accountable. A customized financial plan helps keep you on track with your goals.
Why is a Plan Essential to Your Success?
Whether you are managing your personal finances, have a business, or are looking for financial planning strategies, a comprehensive financial plan serves several purposes. It can help you:
- Create an emergency fund
- Build wealth for the future
- Achieve specific financial goals (from an extended vacation to expanding your business)
- Avoid debt
- Apply your resources more efficiently
- Have the insurance you need to protect your family or business
- Minimize tax liability
- Improve your lifestyle and financial well-being
- Achieve financial independence
- Retire on your terms
- Leave a legacy of your choosing
A customized financial plan puts you in the driver’s seat of your life. It enables you to proactively prepare for specific objectives and positions you to weather life’s inevitable unexpected events.
A Net Positive Impact on Every Area of Life
In addition to financial benefits, a customized financial plan delivers mental and emotional benefits. You may be surprised to discover that up to 73% of people report lower stress levels when they have a clear financial plan. Uncertainty creates anxiety. The less organized your financial world is, the more effort it requires to fulfill each task – from paying bills to taxes.
Here are five of the benefits you receive when you have a financial plan.
1. Goal Setting
A Harvard Business study found a few interesting things about the impact goals can have on our lives and success. They found that the 14% of people with conscious goals were ten times more successful than those without goals. Those that wrote their goals down – only 3% of the total – were even more successful than those with unwritten goals.
Goals add direction and purpose to any area of life. It’s especially helpful to define short-term, mid-term, and long-term financial goals.
2. Motivation and Commitment
It’s easy to meander and be distracted without a well-defined direction. Once you’ve set up expectations for yourself, you are more likely to find the motivation to fulfill them.
Long-term financial goals cannot be realized without consistent effort over time. One of the most significant stumbling blocks to achieving long-term goals is our own natural tendency to veer off course due to unexpected setbacks or short-term desires.
Clearly defined goals, especially when supported by a CERTIFIED FINANCIAL PLANNER™ in the D.C. area, help keep your mind on where you want to go and why. Motivation, discipline, and commitment are found more often in a person who:
- Has a written financial plan
- Understands the ‘why’ behind each objective
- Has a combination of short, mid, and long-term goals
3. Decision-Making Guide
Goals act as guide rails for choices. In your personal life, in a business, or in conjunction with financial planning strategies, defined goals simplify the decision-making process. Instead of wading through conflicting desires, pros and cons, and possible outcomes, you can measure each choice against your stated targets. Will this get me or us closer to our goals? Does this support and align with our desired outcomes? Will we stay on track or deviate off course if we pursue this option? Goals make it easier to take action with confidence.
4. Defined Performance Standards
Through milestones and progress reports, planning helps identify how far you’ve come. Here is where numerical goals are helpful. You can measure how quickly you are growing toward your goal and celebrate how far you’ve come.
Defined performance standards help you make course corrections when necessary. As your finances, family, and personal life evolves, you can easily adjust your contributions and targets without losing any strides or compromising your progress.
5. Improved Financial Outcomes
People with a financial plan are more likely to prepare for emergencies and meet their retirement savings targets. A financial plan begins with the end in mind, so you are able to operate with the proper perspective to balance needs and wants through various stages of life.
A written financial plan may seem like a bunch of numbers on a screen. However, when it is integrated with customized financial planning, it adds direction and meaning to your daily life and choices. It feeds your personal goals and can make the difference between a life you like and a life you love.
If you have questions about your financial plan and would like to know more about what the CERTIFIED FINANCIAL PLANNERs™ at Brown | Miller can do for you, contact us for a free consultation.
This article is intended for informational purposes only, and not to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally.
The information provided in this article represents the opinions of Brown Miller Wealth Management (“BMWM”) and is expressed as of the date hereof and is subject to change. BMWM assumes no obligation to update or otherwise revise our opinions or this article. The observations and views expressed herein may be changed by BMWM at any time without notice. The information may be based on third-party information, which is deemed reliable, but its accuracy and completeness cannot be guaranteed. BMWM provides links for your convenience to websites produced by other providers or industry related material. Accessing websites through links directs you away from our website. BMWM is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites.