A financial plan is an important tool for everyone, whether you are young and just starting a career, married with young children to care for, well into your career with dreams of purchasing a vacation home, starting a new business, nearing retirement, or planning for estate transitions.
A financial plan is tailored to each client’s needs, goals and dreams- it's not a “one size fits all.” I want to touch on 3 common planning mistakes people seem to make:
The first mistake is not doing a plan. Some people believe they are too young to do a plan, perhaps they feel they are not wealthy enough, or feel as though they have too much debt to do a plan. The reality is that nearly everyone can benefit from going through the exercise of setting and prioritizing financial goals. The advice of a financial planner can help navigate potential minefields and clear a path for financial success. Traveling through life without a plan is like taking a cross country road trip without your favorite map app.
The second mistake is not updating a plan. Once you have made the decision to do a financial plan, collected all the data, made a list of goals, had it analyzed, and implemented the recommendations, it's important to realize you're not done! A financial plan is a fluid process which needs to be updated at least annually or when life’s transitions occur. Consider this your plan “maintenance agreement.” Regular updates ensure that no change is too difficult to address.
The third and final planning mistake is not sticking to the plan. Suppose you have an investment plan that is tailored to your risk tolerance, well diversified and appropriately allocated. The stock market takes a dive. You panic and sell. Unfortunately, this is not uncommon for the average investor but it is exactly the wrong thing to do! Studies repeatedly show that the average investor has a tendency to “buy high and sell low.” Doing this is an emotional response to a volatile stock market. A good advisor can help you stay the course in difficult times.
There is no “certain person” that should get a financial plan- everyone can benefit. We take a look at your entire financial picture, and we make recommendations that are in your best interests, incorporating any financial goals you may have. Having a financial plan created for you is so important because it helps maximize your potential for meeting your life goals.