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THE TRUE PURPOSE OF FINANCIAL PLANNING Thumbnail

THE TRUE PURPOSE OF FINANCIAL PLANNING

As a financial advisor, I’ve found my clients ask a broad range of questions concerning their financial situation. However, these questions are all elements of one basic question: “am I going to be okay?” Here is a sample of the types of questions you should be asking yourself:

  • Am I going to be able to retire by the age I have targeted? Can I afford to retire early?
  • Once I retire, will I be able to maintain my current standard of living?
  • If something happens to me, will there be enough money to take care of my spouse, children, and parents?
  • What if I live longer than I anticipate? Will I have enough money to support myself?
  • Can I afford to contribute to my favorite charities?
  • Can I pay for my child’s education? My grandchild?
  • Can I afford to start my own business?
  • Do I have the ability to take my family on an extended vacation?
  • Will I be able to pass my home on to my children?
  • Can I afford to leave my job to pursue something I am passionate about?

Of course, this is but a small sample of the type of questions people may have, but the point of each question is really “can I afford to live the life I envision.” Interestingly, notice that none of these questions have anything to do with achieving a high rate of return, or what the next hot stock will be. Thus, the true purpose of financial planning is determining how we can live the life we desire, not how to maximize our investment accounts.