And that’s great. Implementing a plan to get you from where you are now
financially to accumulating a certain amount of money at a future time or
properly insuring your risks or minimizing taxes is better than just winging
it like most people do.
But, do you really have a clear idea of what is the optimum financial
condition for a household?
And, how do you know what it looks like? In other words, what exactly are
we attempting to achieve when we do financial planning?
So, what is the optimum financial condition? And does that mean it would
be tough enough to weather an economic storm?
Well, financial planning as a subject is broken down into 9 specific
facets and each of these facets must be in a certain level of completeness
for the whole plan to be considered optimum. The optimum financial condition
would be as follows:
1. You are implementing a written comprehensive financial plan. A written
plan would contain programs to get each of these 8 facets into excellent
condition so that the prosperity of the household can be achieved and
monitored. 2. Policies and procedures regarding finances would be known and
followed in the household. This includes knowing the basics principles of
personal finance and being competent to handle the financial affairs of the
household with certainty and success. I have created a course to teach
people these simple basics. 3. You are experiencing affluence in your
business. Your business is expanding and very profitable. You are enjoying
your work and are enjoying success. 4. You have an abundance of income. You
are enjoying a level of income that not only pays for your lifestyle, but
enables you to set aside sufficient funds for retirement and other purposes.
You have also made provisions to generate tax-advantaged income in
retirement that pays for your lifestyle comfortably with the option to work
or not. 5. Your household and business are debt free. Your house is paid off
and you do not carry any other debt. You are comfortably paying for most of
life’s expenses from cash and not from credit. Your credit is also in
excellent shape so if you do need to borrow, you can do so at the best
rates. 6. Your estate plan would be complete. This means that you have
up-to-date wills and other documents to ensure that your health and legal
matters will be taken care of under your directions and not the State. This
also plans to keep estate and gift taxes to a minimum. 7. Your taxes would
be as low as possible. Income taxes will always be levied against income, so
a plan needs to be implemented to not only save taxes today, but for the
rest of your life. Neglecting to plan for income taxes in retirement can
destroy your retirement lifestyle when the time comes. 8. Virtually all of
your assets have protection from loss. This means that you own assets in a
way that minimizes the risk of loss from creditors, market losses, tax
losses, inflation and other forms of asset destruction. 9. Your investments
are stable and productive. The best investments are those that get the best
results for the purpose for which they were invested. In other words, the
best investment isn’t the one with the highest return. If the rest of your
financial plan is being done, you do not have to take unnecessary risks in
other investments to become affluent—you will already be there.
This is the status I would think most people want to experience. There
are a thousand different paths to get there and about a million paths that
will not even get you close—you are taking a path right now, but have you
asked whether that path will get you to this optimum condition - and will it
weather an economic storm? You should know the answer to this question as
well as what you path you need to take to get it to the most optimum level
possible.
There is a direct path to this destination. I found it after a couple of
decades of work—the most effective methods of getting the job done.
If you would like to know more, drop me an email or call.
About the Author
After 15-plus years of being a financial planner, Christopher Music
decided there had to be a better way. Witnessing financial debacles of big
industry and government-driven economies caused Christopher to take action,
developing an instrument that measures the success of any financial plan.
The Financial Security AnalysisTM (FSA) is the back bone of Music’s firm,
Wealth Advisory Associates (WAA). WAA is a financial planning firm focused
on helping private-practice physical therapists understand and implement the
most effective strategies to achieving financial success and security. Visit
www.wealthadvisoryassociates.com
