Yeah financial planning is important, we get that. It seems so obvious that planning for the future is important especially when you want to make big purchases such as a house or a car but beyond that, financial planning is often forgotten about. Saving is great but most people save for one or two big expenses instead of saving for a better lifestyle.
Rising above
Financial planning has the potential to pull you out of your current tax bracket and move towards the 1%ers. If you plan accordingly, you can establish long term wealth and become the wealthy individual you always wanted to be. This type of wealth is beyond having a nice car, a nice house, or even going on vacations; it is having investments and funds after all of the expensive purchases. Your job could pay really well but it’s at a fixed rate unless you get a raise. Even then, there are only a set number of hours in a day so you are limited to the mount of money you can make. Investments and financial planning can help your money make money without you working for it. Most wealthy people invest their money and have a financial plan in order to continuously accumulate their wealth. The secret to financial planning is... Anyone can do it! Anyone can pursue wealth through investments as long as you are able to put some money into the account.
If you’re not sold…
If you are not sold on becoming part of the 1% and becoming wealthy, keep reading.
Let’s say you are not interested in making more money (said no one ever!), financial planning can help you allocate your income so that you can better grasp how much you need for each aspect of your life. For instance, you can audit all your spending habits to see where your money is going after all the bills are paid. Auditing yourself can help you plan for the future because you will understand how much you will be able to set aside monthly. On another note, auditing allows you to examine unnecessary expenses and make cuts to spending in order to increase savings.
Setting goals for yourself is part of financial planning and can be extremely helpful in reaching the wealth you have always dreamed of. When you have goals established, you have a benchmark to look at, meaning you can track your financial success.
Look at it this way, you opened an investment account, invested $100,000 and set a goal to generate 20% or $20,000 off the original investment. At the one-year mark of the investment, you can determine whether or not this account met that benchmark. At that point you can assess any changes that should be made to reach the benchmark or celebrate your big earnings!
Of course, it is special!
Financial planning has the potential to set you far ahead in life with regards to your finances. The more disciplined you are with your money goals and your willingness to accept certain tradeoffs in pursuit of higher returns on your investment, the higher chance you have at being wealthy. Who wouldn’t want to never have to worry about money ever again? Financial planning can help you work towards these goals of not worrying about money.
Even if you are satisfied with your paycheck and have no desire to earn more money on the side, it is always good to talk to a financial advisor about planning. Use the advisor as a wealth resource just in case because someday in the future, you might need them.
While financial planning is an extremely useful way to build your assets, generate wealth, and have more control over your money, it is not guaranteed. The markets are volatile and unpredictable thus there is no fixed way of generating money. Lastly, the investment options for generating more wealth can be long term, meaning, if you let the funds sit and grow for long periods of time, you could potentially be doubling or tripling your initial asset amount.
Talk to an advisor about how to plan for the future; the future you will thank you.
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 performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no assurance that these techniques are suitable for all investors or will yield positive outcomes.