Chinese philosopher Laozi noted that a journey of a thousand miles begins with a single step. Well-seasoned travelers will hasten to add that having the final destination and route in mind also contribute to a journey’s success. Individuals and couples would be well-advised to take the first step on their financial journey – enter the Financial Plan!
A financial plan in its most basic form typically tries to answer the question, “Can I retire?” More specifically, a plan will try to project what level of income can be available at a given retirement age, based on several assumptions such as savings rate, investment returns, inflation, etc. However, a financial plan can and should go well beyond retirement planning to address several important questions, such as:
- Are we paying unnecessary income taxes or capital gains taxes?
- How will I pay for the costs associated with higher learning?
- How should our investment portfolio be designed to best align with our goals and objectives?
- What do we want to happen to our assets if we pass away, and what’s the best way to accomplish this?
- How can I best gift assets to charitable organizations that are important to me?
- Should we be concerned about estate taxes even though we’re not worth millions of dollars?
- Am I taking full advantage of any benefits available from my employer?
- Are we properly using debt to leverage our personal balance sheet?
- Are there any opportunities to reduce our fixed expenses?
- Do we have proper insurance coverage in place to protect our lives, health, income, assets, etc.?
A well-designed financial plan will address each of the above issues, and provide an action plan for any adjustments that should be made to your current situation. A comprehensive financial planner will not only prescribe solutions but will also work with you to implement any required courses of action. Being well-informed is not sufficient – e.g. knowing that diet and exercise are the keys to physical health is not enough without actually eating healthy and starting an exercise regimen. Likewise, knowing the proper financial steps to take is not enough without actually making positive changes!
Our experience has shown us that many individuals and couples can benefit from a second opinion on their financial health. Seeking advice from a qualified financial planner can help expose any areas that should be addressed in order to best guide you on your financial journey.
Douglas J. Bauer, President, and CEO of AllSquare Wealth began his career in the financial services industry in 1975 and is a Certified Financial Planner (CFP®) practitioner. His primary responsibilities include overseeing the direction of the firm, client development, and the servicing of existing client relationships.
AllSquare Wealth provides comprehensive wealth management services to approximately 400 client households in the Capital District and beyond.
AllSquare Wealth Management, LLC is a registered investment adviser.