What Does Good Financial Planning Look Like?
- February 4, 2019
- IRA's, 401(k)'s, and Retirement Accounts
What does financial planning actually look like?
You have your life goals, and you have your money. Where those two things cross over is where your financial planning begins and ends.
Too many times I see financial planning that focuses exclusively on the money itself. How can I earn X-return? What is the best product? Can I earn X-percent? Yet, there is no real focus on your actual goals.
When we invest, we don’t invest to make money just for the heck of it. We invest for goals. What are your goals, especially in retirement? It’s to be able to do the things you want to do. Maybe you want to pay for your grandchildren’s college. I bet most people would say their number one goal is to not have life left at the end of the money. Whatever the goal is that should be the focus of the money.
Don’t get too distracted by what’s going on in the markets. It’s not about buying the right stock. Invest for a specific outcome. Products are important in serving your goals, but more importantly, can you live the life you want in retirement and manage the risks to those goals?
So don’t get distracted by the wrong things. Where the money marries with your life goals is what good financial planning looks like.