This far, you have taken each step. You have (1) engaged in the process – determining whether to do it yourself or ask a fiduciary to furnish advice and provide service for your unique situation. You have (2) gathered data – collecting important financial documents, observing your qualitative perspectives, and reviewing your quantitative resources. You have (3) prepared financial statements – listing income, expenses, assets, liabilities, calculating net cash flow, net worth, and making notes. You have (4) set goals – writing a prioritized list of specific, measurable, action-oriented, reasonable, and time-bound statements of the financial objectives you want to achieve in the future.
Now it is time to develop a personal financial plan. Prepare to achieve your goals!
Keep in mind, personal financial planning is not about perfection. It is thinking and organizing in advance. If you have a plan for prosperity, then you have hope for the future. Here are five recommendations to keep in mind when you develop a personal financial plan.
Later, we will go into more detail on the financial planning subject areas. But for now, our general advice is to manage cash flow. Improve net worth. Pay income taxes. Manage risk. Invest prudently. Retire financially independent and socially secure. And, prepare your estate for wealth transfer.
Chris Bryant is an American financial advisor.