This is Future
Over the years I have developed my own unique life and financial planning process to help us sleep at night and live wholeheartedly by day. This is FUTURE.
Gather and collate information about your life, the lives of your spouse or partner, and your finances. This data becomes the foundation of your plan.
Draw up financial statements of your current situation. Your balance sheet will show your assets, liabilities and net worth. Your cash flow statement will show your income and expenditure.
Use a spreadsheet to project these into the future. Note what this tells you about your ability to achieve important life goals quickly and efficiently, and to be financially secure in the longer term.
Put in place systems to measure your time and money expenditure.
What do you want your future life to look like? List important personal projects. Add detail by painting a word or actual picture of your future life. Set out a time line of when you want to achieve specific goals.
Start to cost these out so you can put them into your lifetime cash flow. Remember that to be able to live a normal life from day-to-day is itself a personal project, and needs to be costed out.
Don’t forget your own personal development, your mind, body, spirit, and the costs of travel with a purpose.
This is about moving from where you are now to where you want to be, and addressing the obstacles. Obstacles may be practical, financial and emotional, internal and external. Your plan begins to form around your solutions to these obstacles.
Emotional or internal obstacles, fear especially, are often greater than practical or financial obstacles, so be imaginative and creative in your approach.
Don’t be afraid to ask for help and build up a professional support team to help you; this may include a life coach, therapist, spiritual adviser, careers adviser, business coach as well as a financial planner, accountant and solicitor.
What resources do you have to utilise? Almost certainly your time, your talents and your assets. How you utilise each of these will determine the quality and value of your life.
Build a structure for your financial assets. Measure and manage your cash flow, setting boundaries (which some call budgets). Use a lifetime cash flow and asset optimisation strategies to adjust the allocation to the various asset classes to balance inflation neutralising growth and volatility neutralising liquidity. Use tax-privileged investment vehicles to reduce tax. Check that other financial products such as mortgages and life assurance still do what you want efficiently and cheaply.
Look at your other resources such as your skill sets, connections, properties and chattels and work out how best to use them in the furtherance of your goals. Some resources, such as your skills, may need upgrading or further development and it may be worth spending some money on them to make them more useful.
Write it down. It does not have to be a long document, and should include your goals, the obstacles, your plan for getting round the obstacles, the way you are going to manage your resources and the changes that need to be made. Set dates and priorities. Set down (on paper or on your preferred app) your spending plans. Include a personal development or mind, body, spirit plan. Your financial plan will include your projected lifetime cash flow and lifetime liquid assets charts, as well as decisions about asset allocation and financial products.
This is where you put the plan into action. It is also about becoming financially proficient through education. Its about staying up to date with developments in the world of personal finance so you can adjust your plans accordingly.
Don’t expect engagement to happen all at once. It is an iterative process during which you will often go back to your plans, review them, adjust them, revise them. Executing the plan involves living your plan on a day-to-day basis, monitoring progress, checking your expenditure of time and money, not losing sight of your goals.
If your start point is one of weakness rather than strength you may be happy to spend a few years consolidating and rebuilding within limited boundaries, before moving on to real goal achievement and expanding boundaries.
You should review of your plans, at least annually. Go back to Step 1 and start over. Each time you do this it becomes easier. Your self-knowledge is in place and simply gets deeper. Your goals may or may not change. The obstacles will be being dealt with. Your resource plan probably just needs maintenance rather than full-blown restructuring.