| What do you need to have in order to put together | | | | discuss how they could allocate that income to save |
| a financial plan? Money, of course, or access to it. | | | | more money, and to minimize taxes, pay down debt, |
| And money, it seems, never stays still. It either | | | | and accumulate an amount of money so that 'one |
| grows over time, or shrinks away, but like water, it | | | | day' they could 'retire' and live off this accumulated |
| has to flow to stay healthy. So why doesn't your | | | | savings. |
| financial advisor discuss the income and cash flow | | | | The problem is, this model means that you are |
| side of planning with you? Might it be that they | | | | looking primarily at allocating the existing resources. |
| haven't been trained to? | | | | You focus on reducing expenses, such as spending, |
| This might be one of the biggest AHAs I've ever had | | | | taxes, and interest rates on debt, while trying at the |
| (at least as far as personal finance goes). I can hardly | | | | same time to put as much as possible aside and get |
| believe it even after having a couple weeks to let it | | | | a high return on that money so it can grow to large |
| sink in. Here are some questions to ask yourself and | | | | amount. |
| your advisor: | | | | This conventional teaching is actually contributing to |
| - What does it take to create personal savings? | | | | the number-one stress people have: running out of |
| - What does it take to have money to spend? | | | | money. |
| - What does it take to qualify for and pay for credit? | | | | Why? Because for our whole lives we've have been |
| - When you are not working because you have | | | | looking forward to financial success by accumulating a |
| retired, or are unable or don't want to anymore, | | | | nest egg of money, rather than looking at the real |
| what do you need to live? | | | | need which is to create income to live the way we |
| The answer to all of these, of course is INCOME. | | | | want. |
| You need income to live today and throughout your | | | | The missing component in financial planning is the |
| life. When you're not working you still need a source | | | | creation of income, or cash flow, both today and in |
| of income to pay your living expenses. | | | | the future. How will you create the income you need |
| Now let's look at the components of personal | | | | now to live the way you want to, and how will you |
| financial planning: | | | | sustain an income when you are not 'working' at your |
| - Cash Management | | | | job? |
| - Tax Planning | | | | The answer is to consider a wide variety of |
| - Risk Management and Insurance | | | | cash-flow generating ideas. Consider it a brainstorming |
| - Credit Management | | | | session, where the sky is the limit. It can be a |
| - Investment Planning | | | | business vehicle, an investment vehicle, or even a |
| - Estate Planning | | | | personal passion that can make money at Christmas |
| - Retirement Planning | | | | craft fairs. The goal can be small or large - just get |
| For most of my career as a financial advisor, I was | | | | the juices flowing! |
| asking clients about their source of income. We would | | | | |