Financial Planning to Achieve Your Goals

Financial Planning to Achieve Your Goals

Kyle Swaim
TB Group LLC


Everybody needs financial planning. But if you’re like most people, you think financial planning is just a synonym for increasing your money. That may be true for some, but for most of us, it’s not that simple. Yes, we would all be pleased with more money, but more money isn’t so much the goal of financial planning as it is a byproduct. A better synonym for financial planning is achieving your goals.


Some of your goals may be conventional: providing for your kids’ college, financing your own retirement, buying a house. Some may be less so: changing your career, taking an around-the-world cruise, starting your own business, owning the winning horse at the Kentucky Derby. Whatever you want out of life, you’re mostly likely to achieve it if you create a plan for doing so.


Most financial planning professionals think of their work as a five-step process. The point of this blog post is to explain those steps.


Step One — Personal Inventory

First, understand your own values, priorities, means, limitations, and responsibilities. You need to answer some questions, some of which may be difficult. How is your health? What is your risk tolerance? What are your wildest dreams? What are your immediate obligations and prospects? What is your earning potential? What are your assets? And what are your debts? Are you insured in all the areas you need to be? You need to be honest when making your inventory because it will be the foundation of your plan.


Step Two — Decide on Your Goals

This is the critical part of the process: expressing what you want to achieve. You do this by describing your goals.


Each of your goals has two parts: an objective and a timetable. Say one of your goals is to provide a college education for your daughter. If she’s eight years old now, and you anticipate she will enter college at 18, your timetable is ten years. Figure out how much you will need — don’t forget to account for 10 years’ cost inflation — and there’s your goal: raise XX dollars in 10 years for daughter’s college.


Step Three — Create the Plan

Once you have an idea of what each goal is going to cost, you have to design investment and savings strategies that will generate the money you need in the time you need it. Prioritize your goals so you will be able to focus on the ones that are most important to you. You may even find that some goals don’t make the cut.


Savings and investment strategies can include instruments like equities, bonds, investment funds, real estate investment trusts, index funds, annuities… the list is virtually endless. And you may need professional expertise to help you figure out your strategies.


Step Four — Implement the Plan

This step is self-evident. You need to make the investments you outlined in the plan. If you don’t happen to be an experienced investor, you may need professional help for this step, too.


Step Five — Monitor Your Progress

While it’s not a good idea to get obsessed with it, you should keep track of the value of your investments. In general, the longer the timetable, the less you need to worry about how you’re doing. Historically, most investments have grown over time. That means if there’s a downturn in the market and your investments all decline in value, they will likely come back again if you just wait. The shorter a goal’s timetable, the more important it is to choose a low-risk (or even risk-free) investment, such as an insured savings account. Goals with longer timetables can accommodate more risk. Once again, a professional financial advisor can help you identify risk levels and opportunities for growth.


Financial Planning to Achieve Your Goals

Even this brief overview should show there is more complexity to financial planning than simply amassing more money. There are a lot of decisions to make and a great deal of learning to master. The important take-away is that financial planning is personal and individual. You know what’s best for you and your family, and the purpose of financial planning is to help you get there. At TB Group, we’re very good at helping you figure out how to formulate your goals. And we’re experts at helping clients find the investment strategies that will help them realize those goals. Click here to set up a call or an appointment with us. You will be surprised at how secure you can feel with a solid financial plan.


Photo: “Person Reading a Book About Fundamentals of Financial Planning” by RDNE Stock Project. Creative Commons License via Pexels.

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