Independent Financial Success: Blueprint, Recipe or Plan

Time is the one commodity that is most needed for completion of any project and also that is in shortest supply. Time is a measure of life in hours, days and years, and only one life is allotted per customer. Given enough time, most anyone can accomplish most anything. But time is in short supply and taken up by other activities like survival and the welfare of others. When the time necessary to learn the skills, acquire the tools and gather the materials is not available, help may be needed.

Whether building a house, baking a cake, or planning a financial future, the proposed task needs a blueprint, a recipe or a planning document for the best chance of success. An experienced carpenter can build a house from the memory of the step-by-step process of previous projects. A chef can seemingly bake a cake without measuring ingredients and timing completion by sight and smell. A CFP can outline a financial plan after one interview with a client. But if a house, a cake or a financial plan are needed by an independent person who is not a carpenter, chef or CFP, then help may be needed.

Process

A one-income, one-person household may be able to get control of personal finances simply by setting aside time to examine monthly bank and credit card statements. Highlighting unnecessary expenses and prioritizing others is a first step toward creating a cash flow statement and budget. Time spent examining expenses can have the most immediate effect on month-to-month finances, while accessing or establishing a route to higher income can be a longer-term process.

But when multiple family members are involved, with multiple payment, withdrawal and transfer methods; or when joint ownership of properties or businesses continue then the tasks become more demanding on the limited supply of time. If a house is needed for shelter now, if dinner is tonight, if finances are out of control, then help may now be needed.

Every serious endeavor needs a time assigned for completion: a construction contract, a menu for dinner or a financial plan. A home is built for current shelter, a cake is baked for a scheduled event and a financial plan is effective only when it is enacted. The value of professional time depends upon the value placed on personal time and the complexity of the financial situation involved.

A new home involves a construction contract, a dinner has a menu with prices, and a Certified Financial Planner (CFP®) will use a Disclosure Agreement (Form ADV) that serves as a contract for services and meets the CFP Board’s Standards of Professional Conduct. The standard planning process used by financial professionals involves six steps: two are the client’s responsibility, two are the domain of the CFP and two are shared.

Standard Financial Planning Roles and Responsibilities

The Client:

1. Chooses the Professional to work with and the goal to work toward.

2. Gathers and provides financial documents, data and information.

The Professional:

3. Analyses, evaluates then projects the current financial situation into the future and compares to stated goals.

4. Recommends changes that would positively affect progress toward those goals.

Both Client and Professional:

5. Agree who is responsible for implementation.

6. Determine how the plan will be monitored.

The heart of the process, and where the professional can save the most time, like the carpenter or the chef, is in the assembly. A pro will know from experience, and will be willing to contract to, how much time and how much cost will be involved in completing and implementing the plan. A CFP can also provide assistance with current needs planning like insurance and employee benefits, and future needs planning for investments, retirement and estates, as well as the continual need for income tax planning.

Materials

The materials needed to create a plan are the data, documents and financial information gathered for analysis and evaluation. But the materials that will be used to enact the plan are the dollars of income, expenses, assets and liabilities—the cash flow and net worth of the independent individual involved. The plan only works after it is implemented and monitored for success, so the most important materials necessary for success may be the resolve to begin and the discipline to maintain the current course of action.

The choice of procedure, be it for construction, baking or finance should be influenced by the current capacity to complete the job with available tools, time and materials. No matter the project, the plan, method or proposal for completion must take into account the time and materials needed. Whether building a house, preparing a dinner menu or planning a financial future, professional carpenters start with a blueprint, professional chefs keep files of recipes and financial professionals follow a standard process.

Spire Wealth Management is a Federally Registered Investment Advisory Firm. Securities offered through an affiliated company, Spire Securities, LLC a Registered Broker/Dealer and member FINRA/SIPC

This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any strategy or investment product, or as investing advice of any kind.