Most CCMI financial planning clients would answer this question by saying “anyone who wants to know when they are financially independent.” Over the years, it has been our experience that no one wakes up thinking, “I just have to do financial planning – starting today!” Instead, most prospective clients contact us when a triggering event occurs, such as a pending sale of a business, an increase or reduction in wages, an employer-issued early retirement option, a new job, a pending real estate sale, buying a business or real estate, a birth, a death, a marriage or a divorce. Someone’s motivation can be fear, such as the realization that if they are going to retire in 2 years, and if they are paid monthly, they only have 24 more paychecks coming in to their household. Another point of anguish may be a major market swing when they are overly concentrated in one asset class or have all their funds in cash.
Although it is preferable to go through the financial planning process when an individual is not at a crisis point in their life, human nature is such that without a perceived need or some pressure point, financial planning services are rarely top of mind for many people.
We have found that a good approach to motivating others is to share a part of your own financial planning experience. For example, if a friend mentions how nervous they are about the markets and wonders why you are so calm, sharing some of these points may be helpful:
- The planning process helped me to understand what money can and cannot do and to have reasonable expectations from my investable dollars.
- By completing my financial planning, I now think long-term when it comes to my portfolio results.
- I now understand the benefit of having a fully diversified portfolio that can weather market ups and downs…so I can sleep better at night!
As advisors, we see similarities between the clients that have been successful and reached their financial goals, which include these common traits:
- They eventually develop and implement a well-designed and disciplined systematic spending plan (better known as a “budget”) and they continue to track their expenses.
- They do their best to keep debt at a minimum.
- They have definitive goals to accomplish over specific time frames.
- They call with questions as they occur and are not hesitant about admitting that they do not know all things financial.
- They usually contact their tax preparer in the fall for tax planning and follow professional counsel on how to legally lower their taxes prior to year-end.
- They are open to new ideas and are willing to pay for expert advice from professional advisors.
- They are adequately insured.
- They take responsibility for their financial decisions after reviewing the various alternatives provided to them.
- They periodically review their financial goals and track their progress with our help.
- They know that happiness in life does not come from having a high net worth; rather, they know happiness is based on having a healthy balanced life, a minimum of financial worries, and taking joy in each day.
Finally, it’s important to acknowledge that embarking on the financial planning process takes time, energy and money, but the peace of mind that can come from this process, along with a host of recommendations, can help put you back on your preferred financial path.
CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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