7 Steps to Financial Security
As a financial planner of over 12 years, and being in the financial services industry for over 27 years, I have seen financial crisis’ come and go, and then rear their ugly head all over again.
Generally speaking, a very similar symptom but caused by a different event. From terrorism to a tech bubble to international financial mismanagement to a health crisis, these events are all different with a similar result – a wobble for financial markets.
Having donated my life’s work to creating peace of mind and financial security, for those who choose to partner with us, we have created tailored strategies that can weather economic conditions. Both the good and not so good.
And although the most recent financial distraction was a little different to some we have experienced in recent decades, at the end of the day, the strategy to create financial security and the ability to live a lifestyle with peace of mind boils down to the same 7 steps.
1. Work with an Adviser (a financial mentor)
One of the most important things financially successful people do is have a mentor or adviser in the field they wish to succeed in.
In personal financial wealth, this should be a Financial Adviser, someone with the expertise to identify and guide you through life’s financial maze. Someone who can provide personal financial advice that is specific to your circumstances, goals and financial possibilities.
This has never been more evident than from the disruption caused by COVID-19, both in Australia and around the world.
Planning is all about creating a path to financial security for both the client and their family.
Working to achieve this clarity is critical on any successful journey including achieving life’s financial goals and protecting the assets that generate the ability to achieve them.
2. Determine where you want to go – What is important to you?
Too much time can be spent trying to work out what you should do, with so many opinions trying to influence your decisions. Whether it be well-meaning, family, friends and work colleagues telling you what they are doing and how it would be great for you isn’t always what’s best for you.
However, what you should do can only be properly determined for you. Understanding where you and your family want to go. It is your life with your dreams and goals and it is you and your families hard work that will allow you to achieve.
An Adviser’s primary initial goal is to get you to clarify for yourself, and if you have a significant other, both of you. Working out where you want to go, how important it is to you, get focus through clearly understanding timelines and dollar amounts required to create success.
3. Define your goals
Think of your goals as places you stop and visit along your roadmap.
Ask questions like:
- What would I like to do in the next 2 years and how much would I like to spend on each of those things?
- What would I like to do in the next 2 to 5 years and how much would I like to spend on each of those things?
- What would I like to do in 5 years plus and how much would I like to spend on each of those things?
- What specifically would I like protected?
- When would I like to be in a position to consider retirement, what does retirement look like to me including how much would I like to live on?
- By providing measurable metrics and having them clearly documented, provides you with both empowerment over you and your family’s financial lives, as well as accountability as we measure how you are tracking towards those stops on your roadmaps.
These regular temperature checks will enable us to see if some adjustments are required along the way.
4. Have a clear understanding of where you are
Before we take off on the journey following a roadmap, it is critical to know the starting point. Otherwise, how do we know what road to take?
Your current financial situation provides insight into what is possible.
Know what financial investments you have, what assets and liabilities are currently in place, what income is contributing to the financial situation, why this existing puzzle is important as well as your potential cash flow and any protections you have in place.
Are there any issues coming up in the foreseeable future that need to be taken into account before we commence the journey? Any windfalls as well?
5. Develop a Plan
The first 4 steps are vital if you would like a roadmap specifically tailored to you and where you and your family would like to go. The roadmap includes the financial advice that paves the way.
A plan developed by a professional focuses on financial possibilities, the financial strategies to achieve the goals and insight into why these strategies are recommended. In other words… the financial path is the next step.
It will also identify what protection of your assets and income is optimal to achieve what you want to achieve.
It is a living document at the start of your journey, one that will move and change as your life takes its turns along the journey.
6. Implement strategies from the plan
A plan not implemented is just a document with words on it, that may be used to balance a table.
Once you understand why the strategies advised in the plan are important to you achieving where YOU and YOUR FAMILY want to go financially, and what you want to protect, you will only begin the financial journey once you implement the strategies.
There is complexity around implementation, dealing with multiple parties. This is where your adviser and their team are of enormous assistance, getting you started on your path for success.
7. Regular Review
Things change, both in your life as well as the world we live in. COVID-19 could not be a better example of this.
Sometimes when following a roadmap there are twists, turns, and roadblocks that all require a change in direction.
Sometimes you just need to have the comfort to know you are still heading in the right direction despite what is happening all around.
Meet your adviser at least once a year to review how you are tracking. And if circumstances change within that timeframe, more often than once a year is ideal.
These meetings will address if there is anything that has changed in your life and what you are wanting to do.
Has any legislation or economic conditions changed that impact the financial strategy? This is a great time to ensure you are on the right road to get to your stops along the way. At times, additional financial advice may be required. A change of circumstance may create a few forks in the road.
Do a health check by updating how you are travelling both with what you are controlling, as well as what the adviser is looking after for you.
Get updated advice, adjust the roadmap if there have been significant changes since the last follow-up meeting, and get back on the journey.
These 7 steps to getting back to financial peace of mind are a framework to shape your financial future. Because with planning, your financial security is just the beginning. The hardest part of the process is getting started. So let me ask you this…. when are you going to take the first step to financial freedom?
This blog has been prepared by Modoras Wealth Management (VIC) Pty Ltd ACN 145 368 869, a Corporate Authorised Representative (No. 383940) of Modoras Pty Ltd ABN 86 068 034 908 an Australian Financial Services and Credit Licences (Number 233209), located at Level 3, 50-56 Sanders St, Upper Mt Gravatt Q 4122. The information and opinions contained in this fact sheet are general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Wealth Management (VIC) Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this fact sheet can change without notice. Modoras Wealth Management (VIC) Pty Ltd does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Wealth Management (VIC) Pty Ltd nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.