Perhaps the most common reason for the gaping holes in one’s financial plan is the lack of focus on what you are trying to accomplish. Why get your financial house in order?
During the course of my week as a financial professional, we frequently see people with gaping holes in the financial plans. Some have no wills, some have poorly constructed portfolios and others are severely underinsured. Rarely are they flying solo; often there is the typical collection of professionals such as lawyers, accountants, brokers and insurance agents who have advised on their particular subject matter. So why the gaps?
It may be as simple as the lack of communication from one professional to another. Every expert simply does his thing without knowing what the other experts are doing or thinking about recommending to the client. Even for simple situations, a little collaboration may go a long way toward improving the odds of achieving your financial dreams and goals.
Fear is another cause for gaps in financial plans. Some people are simply afraid to hear the cold hard truth. Whether it is an insurance person suggesting that you may be underinsured or the investment professional suggesting that you add regularly to your accounts, fear of making the wrong move often paralyzes progress. To mitigate your fears, learn more about your choices to make an informed decision and understand the consequences of making no decision.
Perhaps the most common reason for the gaping holes in one’s financial plan is the lack of focus on what you are trying to accomplish.
For example, if your goals include educating children or grandchildren in the event of your premature demise, you may want to listen more carefully to the insurance recommendation. Similarly, if you want your business to survive to the second generation, you may need to engage with your insurance agent, accountant and attorney.
Take a few moments, and list out your goals. Start with some looking you right in the face, such as college expenses, your replacement windows or home painting. Get a good handle on the quantitative financial issues that you need to solve with a timeline for when.
Beyond the quantitative goals, start to look at the qualitative side of your life with an open mind. Develop a realistic vision of how you want to spend your time, and what is most important to you. The hope for you is that each of these categories will spark emotions strong enough to get you moving in the right direction to eliminate the gaps in your financial plans.
John P. Napolitano CFP®, CPA, PFS, MST is Founder and Chairman of Napier Financial in Braintree, MA. Visit napierfinancial.com for more information. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investment and financial planning advice offered through US Financial Advisors, a Registered Investment Advisor.
