Questions to Ponder
-How do you find your journey up to this point in your life?
-Are you happy?
-Do you feel that you are on-track towards achieving your lifetime goals and objectives?
-Moving ahead, how is your journey going to be?
-Are you prepared to invest your Time, Energy and Money more efficiently in ways that are conducive to building wealth?
-Who are going to be in your SFCM advisory team?
-Have you identified your current assets position?
-Do you have the slightest clue as to how your future assets position will look like?
-How are you going to manage and protect your wealth plan against the 3 shocks – timeline shocks, market shocks and self-funding shocks?
“A journey of a thousand miles starts with a single step… in the right direction.”
The 8 Steps Toward a Winning Financial Plan
1. Establish your timeline- Gen Y, Gen X, Baby Boomers or Retirees
2. Know your Dominant Investing Motives (D.I.M.)
3. Cash flow Revealed (Income/Expenses/Assets and Liabilities)
4. Strategise your plan with the Protector and the Strategist (Analyse your financial needs and capital requirements)
5. Formulate a strategy that can withstand shocks – (Time Line Shocks, Distribution Shock, Self-funding Shocks, Estate Duty Shock, Medical Premium Shock, Market Shocks, Economic Shock, Valuation Shock, Currency Shock, Political Shock, Event Shock)
6. Execute the plan in phases
7. Establish a Witness Program
8. Periodically monitor and review
Establish Your Timeline
It is important to know where you are now and where you are going at each point of your timeline. Once you crossed over to a new life stage, there will be no chance for turning back. You are expected to manage the new set of challenges in the coming years ahead. Know your responsibilities and be accountable for them.
Know Your Dominant Investing Motive (D.I.M.)
If you do not know why you are doing certain things or what has been the basis by which you have made a certain decision, it will be almost impossible to determine the most efficient way in which you should allocate your resources. In order to stand firm in your decisions, you need to understand the real reasons why you have made certain judgement calls. Without a strong conviction regarding your decisions, you will be like a small boat, tossed to and fro in an open sea – without the slightest idea where you will end up. Know your D.I.M. and be enthusiastic about it. Challenge your D.I.M. every day by investing your Time, Energy and Money efficiently to create wealth for yourself and your loved ones.
Cash Flow Revealed
Unless you are able to provide your SFCM with an accurate set of financial information, he will not be able to do a good or thorough job for you. Important information that is needed for a reasonable financial plan to be done includes your
All information gathered by your SFCM is considered Private and Confidential. No information should be disclosed to anyone without your permission. This is part of the professional ethics and standards expected of all professional advisers. In addition, your SFCM has the duty of care and due diligence to update your financial data once every 6 months to ensure the currency of your financial plan.
Strategise Your Plan with the Protector and The Strategist
Ask as many questions as you want. Be open with your SFCM in all the areas of your personal and family financial planning – goals, objectives, concerns, worries, fears and doubts. The more your SFCM knows about you and your circumstances, the more accurate he can be in strategising your financial road map to help you accomplish your lifetime financial goals and objectives. On your part, you have the obligation and due diligence to provide your SFCM all the relevant information needed with completeness and accuracy
Formulate a Strategy that can withstand shocks
No financial plan will be good enough if it is unable to withstand the various shocks – timeline shocks, market shocks and self-funding shocks. The key role for your SFCM is to create a financial portfolio that will stay resilient even in times of crisis- one that is able to fulfil its function and purpose despite the shocks.
Executing The Plan in Phases
No matter how great a financial plan may look on paper, as long as it is not implemented and as long as no action is taken to institute the recommendations, nothing will change at all. Procrastinations will not bring about any transformation in your financial situation; only implemented recommendations will make a real difference over the long term. A good SFCM will not be pushy to rush you into making any hasty decision – certainly not in a salesman-like manner. A professional SDCM will instead walk you through the entire process, explaining to you the various considerations in the recommended solutions, as well as highlighting the pros and cons of each option for your deliberation. If your SFCM is rushing you to make decisions on the recommended solutions – be wary. You should be working with a Strategic Financial Coach and Mentor (SFCM), not a typical financial salesman.
Establishing A Witness Program
It may seem almost impossible, yet many legitimate claims were left unclaimed due simply to the lack of awareness or knowledge or ignorance about how to go about making a proper claim against an indemnified risk. If your SFCM is professional and worthy of his credentials, he would have assisted you with a Witness Program. A Witness Program is a time-tested and event-proven process of appointing 2 or 3 persons you know to bear witness to the financial program that your SFCM has established for you. Through the Witness Program, you and your loved ones will not be left in a lurch if something catastrophic should happen to you unexpectedly. The “witnesses” will be able to assist your family in expediting the claim process. The Witness Program is a strategic, as well as value-added initiative that can be provided by a good and professional SFCM. If your SFCM is not helping you to establish all these essential programs, you really do not have a good and trusted SFCM yet. In this case, you may have to continue your search until you find a really good SFCM whom you can trust.
Periodic Monitor and Review
A good and professional SFCM is like a good doctor. He will keep all your records from the first day you engage his services. In addition to keeping tab of your planning process with him, he will also have a system of managing your future meetings with him. This is an absolutely important and integral part of your SFCM’s work process because the success of your financial plan depends largely on how well it is being monitored and how often it is being reviewed. A SFCM who is worth his sale, should have a proven and tested tracking system to keep pace with your changing needs and development, as well as all the future review sessions.
The next article I will talk about other questions to ponder – remember the rich use their TIME, ENERGY AND RESOURCES at the right place.