Critical Path to Planning Success

April 29, 2020

We've been spending a lot of time with clients lately who are struggling with challenging financial questions. Today I’m going to discuss the crucial steps necessary to really get to the bottom of financial circumstances, whether it be investment management or education or retirement income, planning.  The goal is to help you make smarter financial choices, and more importantly, avoiding mistakes. There's a real critical path to doing preparing a proper financial plan.

I outline these steps in detail in my book, the “Financial Freedom Blueprint. I highly recommend that you get a copy of that. In fact, if you just email us at  we will provide to you a signed hard copy of it.   We have some extra hard copies that we really wanted to give away as we are dealing with this lockdown.

In this video I will simply and quickly go through the steps for a proper financial plan.  Every effective plan should follow these steps in order.  And if you're not doing these steps, there's a really good chance that you might be missing something. These key to these steps are if you miss any of them or if you don't do them in order, it's really likely that something will be lost, and that could actually be very, very costly.   Let’s go through the basic steps

The first step is to get a clear understanding of your personal financial circumstances. It’s really important to understand at a very detailed level, where you are right now financially.  What are the qualitative pieces of information about your life? Things like your health, your life expectancy, your family circumstances, your values, and your expectations.  What are those crucial things and how do they reflect in your situation?  

There's really two types of information in this step. There's qualitative information and then there's quantitative information. Quantitative information is all about the numbers. Some examples of quantitative information are:  the basics like your age, your wife's age, your kids age, how many dependents you have, what is your income? What are your expenses? What is your cash flow? What are you saving? What is your employer contributions to your retirement plan? What assets do you have? What liquidity do you have?  What are your employee benefits? What's your insurance? What are your education accounts.  The list can get pretty big but now you have all that quantitative information, that's step one. The goal is to get a clear assessment of your current situation.   Now this step can take some time to get done. But you need to go through this process before you go any further.

Step two, is to identify and select your goals. This is a two-step process. The first part of the process is to list out all the goals that you want to acheive and identify them as your potential goals. And then there's a process of prioritizing these goals. What are your main priorities?  You want to get your goals listed and in order of priority because if you don't, the next steps will be harder to accomplish. Sometimes consulting with somebody can really help you sort through your thoughts, get a second opinion and get to your priorities quickly and more accurately in the long run.

Step three is to analyze your current course of action and potential alternative courses of action. What are you doing right now toward your goals?  How much am I saving? What is my plan right now, and how am I moving forward? Often this thought process  alone will get you thinking, “wow, I'm not doing enough towards this or towards that goal”. Once you've figured out what you're doing right now, then it is time to evaluate alternative courses of action.  What are the different courses of action I can take that are available to me? Is there a better course of action that will increase my net worth, free up my time, or improve my life in any way?   To do this correctly, scenario analysis is necessary by crunching numbers and comparing the outcomes during good and bad times.   So it's really important to do the scenario analysis.

Step four is to develop the recommendations to accomplish your goals with the highest probability of success. After reviewing your alternatives, you normally will have a good idea what your next best action is.   You can really boil it down to what are the what you will do “boots on the ground”. What am I going

Step five, is to actually get the plan implemented, and then lastly, you want to monitor the progress.  This is a circular process that is ongoing.   You start the process and then you keep repeat it at least annually.  As times going on, there's going to be changes in your situations or in the economy that will require adjustments along the way.

All right, so those are the steps.

Get the Roadmap PDF that will give you the steps professionals use to get the best result.  Start at page 20. 

CLICK HERE to ask for a free signed copy of my book “The Financial Freedom Blueprint”.  Just email us your name and address.