So What’s the Plan?

Some time ago, I had a meeting with a couple in their fifties that owned their own construction business—I’ll call them the “Builders.” They hadn’t yet decided to work with FPC, but they wanted to see if we could help.

On paper, the Builder family looked great. Business was going well. They had more than enough cash coming in, and the excess money went toward paying off debt for their business equipment. Whenever more money came in, the Builders put it right back into their business.

“So what’s the plan here?” I asked.

“Well, we would like to scale back our involvement in the business at some point and retire eventually.”

I heard two red flags in that sentence: “at some point” and “eventually.” While the Builders were doing well for themselves, there was clearly no plan.

So we made one. We set up a savings strategy for retirement and figured out how to leverage their debt to their advantage.

As a result of that meeting, the Builders became clients and still are today. Now they have a nest egg on the side, the business is growing, and their involvement at work is on the decline. They’re not necessarily making more money, but now that money grows with a plan.

Typically, when someone comes into our office and wants to work with us, our first question is exactly what I asked the Builders: “What’s the plan?”

If they can’t answer that question, we have a conversation that revolves around these three areas:

Your Life Goals

A lot of people misinterpret an advisor asking them about their life goals by answering, “I want to buy a five-bedroom house in the valley, a Model X for the family, and a boat for the weekends.”

We’re not just asking about your financial goals; we’re talking about your life goals. Yes, where you want to live is important, as are vehicles and entertainment desires. But we want to know much more than that: How many kids do you want to have? Are you planning on helping them with college? What are your career goals? When and where do you want to retire? We even want to know what hobbies you enjoy.

The answers to these questions will help us determine two essential factors of financial planning: your values and interests. Once we know who you are and what you value, our job becomes much easier.

Your Timeline

Have you heard of Bruce Gemmell? Probably not, but chances are you’ve heard of Olympic swimmer Katie Ledecky. Yes, Ledecky—who walked away from Rio with four golds and one silver—is amazing, but she didn’t win them alone. Some of the credit should go to her coach—Gemmell—who gave her the tools, training, and tips she needed to be in optimal shape in time for the 2016 games.

We often see new clients come in ready to retire with $2 million. That’s certainly nothing to sneeze at, but it always makes me think about the importance of coaches. If they had just had a financial coach at their side for all that time leading up to retirement, it’s possible they could have had $5 or even $10 million. They just needed someone to help put a deadline in place and give them the tools, training, and tips to reach their optimal financial shape in time for retirement.

After we figure out your goals, we add checkpoints along the way to help make sure you’re on the right track. You want to pay off your house? Great! Let’s figure out how and when. You want to pay for your twins to attend college? More power to you. Let’s nail down the how and when of that, too. The how and when of investing are often overlooked questions, but you might not ever realize your goals without them. As Shark Tank star Robert Herjavec says, “A goal without a timeline is just a dream.”

Your Current Finances

Current finances don’t just refer to what you have in the bank. We want to know as much as possible about where you are right now—houses, savings, debts, salary, expected windfalls.

If you’re thinking it seems strange that this is the last factor of the three, that is by design. Yes, we care about your finances, but if that’s all your advisor asks about, you need to find a new advisor. Assets are important, but they only exist to help you accomplish your goals on your timeline.

People often hire an advisor thinking the relationship is all about investments. That is only a sliver of what a good advisor does. At FPC, we’re wealth managers, meaning we oversee anything remotely related to your money.

We won’t sell your house for you, but we’ll be there making sure your finances are taken care of. We can’t make sure your kids graduate with honors, but we’ll help you make sure you can afford the college they want to attend.

Saving money without a plan is like running a race with no finish line. You’re engaging in the right activity, but there’s no way to know how far you have to go and when you’ve accomplished your goal. That’s why our first step is to always get a plan together.

So what’s your plan?

Let’s talk about it. Click here to contact us today.

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