For a GOOD financial plan, allocate money and time

Everyone has heard the analogy about the iceberg, you know, you only see the tip of the iceberg, but there’s a lot more to it than that!

You can use this analogy for a lot of things really (I do often), but it’s a very true one when it comes to getting a good financial plan together that will reflect your true needs, wants and objectives for your financial future.

I do emphasise the word, good here, as like anything, if you pay across hard-earned money for something, you want to be sure you’re getting value for your money, don’t you?

I often here people say “why do I need to get a financial plan together”? Or, more importantly, why do I have to pay to get a financial plan together?…the answer to this is simple and I’ll use another well-worn saying here which is People don’t plan to fail, they fail to plan. So true for the majority of our population as I guess life just gets in the way and most people don’t get around to doing it and then they wake up 35 years down the track and wonder what the hell happened???

On the subject of actually paying for the financial plan, my comments to this statement could be many, but I’ll keep it brief for now. Having a professional prepare a detailed financial plan (AKA, Statement of Advice) that truly reflects your personal financial circumstances and also takes into account what it is you want to achieve in the future, takes time, research and effort and all of these things cost money.

Not to mention the fact that a true financial professional knows what he or she is doing and will bring something to the table that you just can’t (apart from specific expertise) and that’s objectivity…VERY important!

Even for people who are high-income earners and have reasonable, or in some cases, very strong asset bases with low debt levels, they can get so much more traction from a well prepared financial plan. Just because they might be doing “very well” by the standards of us mere-mortals J with a good financial plan in hand, they could do so much better.

In fact, recently I prepared a financial plan for one such individual who was doing very well in his business, earning really good money, growing his family asset base, as well as growing the family business.

As a financial adviser, I was impressed with his candid attitude when he said, “I need to focus on what it is I do best and build this business and make money and find a professional I can trust to assist me to secure the financial future for myself and my family”.

It wasn’t the fact that I was preparing a comprehensive financial plan for him that impressed me, as I’ve done plenty of them. It was the fact that he didn’t need to be told or convinced that a well prepared and executed financial plan would benefit him far more than the cost of getting it done.

Along with it he was also prepared to allocate the necessary time for me to get all the information I needed to get the job done properly and spend more time down the track with reviews and adjustments whenever it was needed. And guess what, he’s getting really good results from this plan that has been devised for him.

Don’t think for one minute that I’m advocating that financial plans are only for the well off and high-income earners, as that couldn’t be further from the truth. In fact, everyone can, and should get a financial plan prepared for themselves. Perhaps if more people did this there would be less financial hardship in a lot of families and especially a much higher level of self-funded retirees in society, which has got to be a good thing overall for the economy.

I’ve said before that something like this should be taught at schools to our kids from an early age, or at least in early high school to give kids a good understanding of money management etc. But, I don’t want to get started on this particular subject right now. I’ll leave that for another forthcoming blog article.

Of course it’s all good and well and to go out and find who you think is a good financial planner, then pay them some money to prepare a plan for you and then you go and shove it in the draw somewhere safe and never do anything with it.

And to add insult to injury, that so called good financial planner never even picks up the phone and calls you to follow up after you’ve gotten your plan and to get things moving forward in the right direction.

Both of these are wrong! Plans require action to make them work and action is what gets us somewhere, anywhere in life! AND, to be a good financial planner he or she needs to follow up and stay in touch with the client and motivate them to put the plan in action.

In my experience, anyone can get great results from a well prepared, but most importantly, a well executed financial plan. And I do mean anyone. It doesn’t matter what background you have, what type of job you have or how much money you earn. A good financial plan that is executed and followed through will almost always reap great benefits to the plan-owner.

It’s important also for everyone in this equation to have realistic expectations about the outcomes. Nothing great or worthwhile ever happens quickly, remember that. I always like to explain this to my clients from the very out-set of the relationship, and for financial planning outcomes to be successful there will need to be a relationship of sorts in place between the planner and the client.

That’s just the way it is and will always be and it’s the main reason why robots will never take the place of successful financial planning humans who develop a working relationship.

This is not a one-size-fits-all industry and good financial planners know exactly that.

So, if you really want to have financial prosperity in your life, go get a good financial plan happening…can’t go wrong!

The writer of this article Gary Fabian, is a qualified Gold Coast financial adviser and director of Precision Advisory.

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