Rockwills Wealth Planner

The Process

Some people think that financial planning is hard to do and never get round to doing it.

Financial planning is not so difficult. Really.

All one needs to understand is the process, which can be summarised as follows:

		1.	Know current financial status
			Determine what the current net worth (assets less liabilities) is. This is where one is now.

		2.	Know cash inflows and outflows
			Estimate what the earning capacity, expenses and other financial commitments are like. This is like the vehicle that can go somewhere.

	3.	Set financial goals
		Define in monetary terms and targeted timing, taking into consideration major risk concerns. This is where one wants to be. The destination.

	4.	Evaluate risk profile
		This can range from risk averse to very adventurous. This is like the mindset of the driver.

	5.	Develop a financial plan
		This would cover a selection of risk protection, financial and investment structures and strategies that suit one's risk profile. Like choosing which road to take. The highway is safer but longer. The shortcut is faster but may have more dangers. This is the plan - the chosen route that will bring a person from where he/she is now to where he/she wants to be.

		6.	Project financial outcomes
			Assumptions need to be made on investment portfolio returns, earnings growth and inflation. Like working out the journey distance and the speed of the vehicle.

		7.	Adjust the plan
			Assess if the projected financial outcomes meet the desired goals. When they are short, adjustments to the plan are needed either with the return, and hence the portfolio, or with the other anticipated inflows or outflows, or the goals need to be revised. Like deciding on final choice of vehicle, route and destination.

		8.	Execute
			Implement the plan. Drive!

		9.	Monitoring
			Track periodically to see if one is on course or not. Review whether changed circumstances warrant change in plan. Like watching the road signs and the dashboard to ensure route and progress of journey are as planned and whether conditions of the road or vehicle require route modification.

While the process is not difficult once understood, putting the plan together may be somewhat tedious. But with Wealthbox, it becomes surprisingly simple.

The Goals >>

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