How a Real Financial Plan Gets Built

Before the KEEPS Method™ had a name, its bones were here: what an actual plan contains, and the framework that turns a drawer of accounts into a system.

Cheat sheet for creating a personal financial plan

Taking control of personal finances is one of the best ways towards jump-starting financial success. For many ready to start creating their financial future an abundance of investment options, challenging tax laws, and more leave them scratching their heads, unsure of where to begin. The right plan defines financial goals and outlines intelligent methods for aiming towards them. This year, get a firm grasp on personal finances, create financial goals, and define insightful strategies for pursuing them.  Get started today with this cheat sheet for creating a personal financial plan.

1. Begin with the End in Mind

Setting realistic goals to increase net worth gives a clear start and end point for success. Goals can be short- or long-term.  The same goals may be long- or short-term depending on the individual.  Long-term financial goals can include saving for retirement, portfolio growth, education savings and more.  Short-term goals often include debt relief, creating an emergency savings account, and purchasing a car.  What does success mean to you?  Define your version of success to begin moving toward it.

2. Calculate Net Worth

Find out where the money is coming from, and see where it is going.  Calculating net worth involves a number of factors. The basic mathematical equation for calculating net worth is to add what you own (assets) and subtract from that what you owe (liabilities). To calculate assets, start big and work in. Begin with large and long-term investments, tallying investments of diminishing scale from there. Subtract debts and other financial obligations to find net worth. With an account of personal net worth, aim to grow it.

3. Develop Intelligent Strategies

With realistic goals established, create intelligent strategies for managing them.  An intelligent strategy takes into account more than a goal and a means for achievement.  An intelligent strategy considers potential market shifts, personal challenges, and more.  Strategies taking the most into account have the greatest flexibility.  Be thorough and create additional strategies to accommodate unexpected changes.

4. Get Insured

With an end goal in mind, reduce the chances for interruption with adequate insurance protection.  The best-laid financial plan can be derailed by the unexpected.  This can include term- and whole-life insurance, disability insurance and more.  The right insurance will vary by individual.  Age, marital status, annual earnings and more will help determine the right levels of protection. Layers of insurance protection may help keep financial goals on track.

5. Take Action

Having calculated net worth, determined goals, outlined strategies for pursuing them and prepared for the unexpected, it is time to act.   A strategy can only yield results when put into motion.  Maintaining realistic expectations will help with responding to shifts in life and the market.  Expect to review a financial plan often.  Family growth, the purchase of a new home, and other life changes may call for changes to a financial plan.  A shift in the market may call for adjustments to a financial plan.  Those prepared and expecting to respond are better able to.

6. Get Advice

The challenges of creating a financial plan are going to be different for each person.  Talk to a financial advisor for help in creating a financial plan that works.  A financial advisor can help with:

• Financial planning and advice for those ready to get a grasp on their finances yet need guidance.
• Responding to unexpected income increases and other changes in wealth.
• Money management and advice for those with limited time for personal finances.
• Specialized guidance on money matters.
• Advice on potential market changes affecting goals.
• Evaluating financial plans to get the most from investments.
• A professional opinion about financial goals, decisions, and more.

Find the path to your success and start striving towards financial goals today.  A financial advisor can help with all stages of a financial plan from evaluation, creation, implementation, and more.  It's time to create the future you want.  Contact ProsperiFi at 847-292-4475 to create a personal financial plan today.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

An easy framework for your financial strategy

Regardless of where you are in your financial journey, having a financial planning strategy is critical towards experiencing a positive outcome. A dream without a plan is just that, a dream. You may currently have an idea of what you want your financial future to be. Having a successful financial plan requires time to slow down, pull your resources together while working with your current professional service providers and laying out how everything fits in place today. Looking out into the future will help you determine which items to bring along with you for the future. Follow this simple framework to build, preserve, and spend your wealth.

Guiding Principals

You’re planning and investing for the future, not today. Establish a non-negotiable list of principals that will be with you each step of the way.

• Build a solid strategy which outlines your personal, professional and financial objectives.
• Be realistic with your expectations and the outcomes you hope to achieve.
• Identify trusted advisors with a clear standard of care and regularly keep them accountable. Be prepared to ask questions when things are not up to your expectations.
• Remember that behavior drives decisions; maintain your plan to stay on course.
• Cash flow, cash flow, cash flow. Consider this when building a personal spending strategy or evaluating an investment.
• Actively manage risk in all areas of planning, including career, longevity and generational concerns.

Build

Save and invest according to your needs and your lifestyle. Create a saving plan and use a simple investment policy statement to outline what you’re comfortable owning in your portfolio.

• Think globally and identify themes that you or your fund managers can intelligently allocate to.
• Create a personal investment allocation statement which outlines your appetite for risk, asset allocation and even procedures to minimize losses.
• Avoid the noise - the media does not understand your personal objectives and cannot have your best interests in mind.
• Cash is king and sometimes the best investment is the one you don’t make.
• Avoid the rear-view mirror when it comes to money, there’s a reason for the disclaimer “past performance is not indicative of future results.”  History should provide a lesson and not a trigger to expect more of the same.

Preserve

Risk is all around us. Focus on identifying and managing it. Work with your service professionals to help you in this process.

• Encourage and expect collaboration with your various service professionals to identify risk and build this into your planning decisions.
• Diversification goes beyond just your portfolio. Considering diversify your income resources now, and in retirement. Consider the various tax aspects of these income sources, which can be diversified as well.
• Remove emotions by automating and delegating decisions to the advisors on your team.
• An optimal portfolio is one that aligns with your personal game plan; be realistic about how much risk you can stomach. Sleeping well may serve you better than the anxiety that comes with a challenging market cycle.
• Safety and certainty are not the same thing. CD’s and cash can lose purchasing power just as any investment can suffer a bear market.

Spend

What gets measured, gets managed. What better way to keep score than knowing where your money goes and who gets it.

• Create a simple income statement which will help you identify needs vs. wants and unlock free cash flow to fund future goals.
• Maintain a simple balance sheet that lays out what you own and what you owe.
• Keep track of your key contacts and a short memo on what each person or company is doing for you.
• Stakeholders are the people most important to you and your personal plan. Don’t be afraid to involve and educate them because applied knowledge is power to honor your wishes.

It’s your money. Plan Wisely.

Shocks and surprises come up when you least expect them, but lady luck looks out for those with a plan. It’s best to invest time now to set the right course, stick to it and experience better outcomes along the way. Use this framework to help build a financial plan that may help you achieve your goals. If you’re ready to work with a team that specializes in creating personal financial strategies tailored to your own wealth goals, call ProsperiFi at 847-292-4475. We’ll help you plan wisely.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.