I’ve worked as a financial advisor, coach and educator for over 15 years. During that time, I’ve learned a tremendous amount related to how clients behave regarding financial decisions. Most of the people I meet are happy to tell you about their investment portfolio, how well they’re doing and yet, they almost never tell you where they’re lacking in their planning. I also learned quickly that most clients are alike in that they almost always have one particular trait in common:
Clients are truly exposed to one or more wealth eroding factors.
Wealth eroding factors can include premature death, disability, liability coverage, a long term care event, no plan for a large healthcare related expense, lack of tax diversification, inflation, lack of a defined investment plan, and market volatility. Additionally, not having ample liquid resources to pay for an expense that wasn’t anticipated can cause clients to have to raise the cash unnecessarily from other resources without a plan for doing so. Protecting what you’ve worked so hard to accumulate should be the first priority in any sound retirement or financial plan. Without a plan that identifies and lays out the steps to address wealth eroding factors in your financial world, you may be only focusing on the future growth potential of your investments.
Additionally, a plan that doesn’t address other important aspects of your financial life falls short. Social security, current and anticipated debts, future pension income, college savings, your mortgage, other insurance needs, and philanthropic goals should all be planned for. Understanding what retirement “looks like” is equally vital…especially when there are multiple decision makers involved. Having the discussion now and planning accordingly will help to make the process easier down the road. Many times, our married clients have different ideas of what retirement means to them and often haven’t discussed those differences.
Protect your money by addressing potential eroding factors of wealth. Plan for the future utilizing sound planning principles. Give yourself the best chance to prosper!