Terence Tobin, Certified Financial Planner®, at Rich Ideas
When to work with a financial planner
The sooner one starts working with a financial planner the better. Often, I find that there is a perception that a person needs wealth before they engage in the planning and advisory process, and nothing could be further from the truth. Designing a financial plan, is critical for lifelong success and ideally you should start with your first job. Get the right habits in place, will set you up for decades of success and help you achieve your goals far quicker than you planned.
Goals are simply price tags for the lifestyle we want to live and your financial planner, can help you achieve those with the right plan, structures and solutions.
Financial planning is often triggered when there is a life event, such as changing jobs or getting a promotion; marriage, divorce, or the birth of a child; starting or selling a business; moving to a new location and managing an inheritance or experiencing the death of a loved one; as examples.
The above list, although not extensive highlights at the very least where you can benefit from financial advice from a financial planner.
Also do your own research on financial planners, based on referrals and recommendations from your trusted circle. Ask your financial planner about their qualifications and designations (CFP® being the highest designation available), their advice and planning philosophy, how are they remunerated and by who as well as who their ideal client is and the type of work they enjoy. Don’t settle on interviewing one financial planner, speak to at least three, so you can assess a suitable fit.
Key Areas of Financial Planning
It is fundamental to focus on all areas that can affect your financial stability in a structured flow. To begin with, everyone needs a will and estate plan. I feel this is your most important financial planning document and sadly it is the one most overlooked and neglected.
Once we have that done, I like to work on cashflow management, debt management and ensuring your income aligns to your goals, value and the lifestyle you are wanting to live. We need to understand all the complexities that exist and break them down into simple to understand elements; like ingredients that make up a recipe for the most delicious cheesecake ever.
Now that we have that concluded, lets consider tax planning, investment planning and what does financial freedom (retirement) look like for you. No two people are the same and no two plans should be the same.
Sadly, life does throw us challenges and curve balls from time to time, these are risks we need to manage and protect you and your wealth creation strategy against. I call this personal protection benefits which are both living benefits and after life benefits, including protecting your income, health and loved ones. If your balance sheet can’t afford the financial burden, lets move that burden to a balance sheet who can afford it and pay them a small fee to give us peace of mind.
Where needed, we include business structures, business planning and risk planning as well as offshore asset protection and trusts.
This list is not meant to be all inclusive, but it should give you a broad idea of what a financial planner should focus on with you.
All the above, plus your goals, values, lifestyle and family are considered when designing your plan. This process is not a once off process, it evolves, changes and updates and should be reviewed as often as is required. At the very least, once a year.
The ripple effect of financial decisions
When we neglect the full planning journey and all the elements of financial well-being we run the risk of derailing our success.
You can’t visit a doctor when sick, and not let them do their baseline checks. The same applies to financial planning. We need to see everything, talk about everything and plan as comprehensively as possible.
A financial planner helps manage these interdependencies.
Financial planning is a journey for all and everyone should have a financial planner.
ENDS
