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The Missing Piece in Financial Planning

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



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