Financial planning is a very important activity that will help you reach your financial goals and achieve success.  Some aspects of financial planning can be done by yourself, but as you start reaching higher levels of financial success leading to increased complexity in your financial life you may need the help of a financial advisor.

Financial Goals

The very first step in the financial planning process is establishing your financial goals.  Have you sat down and compiled a list of your short-term and long-term financial goals?  This is the foundation of financial planning.  Prepare a spreadsheet and in each column lay out the following:

1. The name of the goal
2. A brief description of what the goal is
3. Your current state , or where you are now
4. A column explaining the gap between where you are now to where you want to be
5. A plan on how you will bridge the gap above

Savings Plan

 

Once you have established your financial goals including a detailed plan on how to bridge the gap between your current state and your desired state, you need to put together a detailed savings plan.  The savings plan should be a multi-year spreadsheet containing your income at the top and a list of your major expenses underneath.  Subtract the expenses from the income to come up with your multi-year savings plan.  This is not yet a detailed budget; it is simply a realistic high level plan that will allow you to bridge the gap of where you are to where you want to be.

 

Detailed Budget

 

A detailed budget allows you to take the savings plan and focus on the year at hand in detail.  This detailed budget should include all of sources of income and all your expenses including auto, housing, clothing, taxes, etc.  The end result should be a total amount saved that matches the amount in the high-level savings plan above.

 

Investment Plan

 

Saving is the first step in reaching your financial goals.  But savings need the leverage of investments in order to grow fast and help you reach your goals quicker.  You should match your investment plan to your goal horizon.  Savings for short-term goals should be invested in conservative, low risk investments such as bonds and cash.  Long-term goals can be invested in riskier investment instruments such as stocks because you will have the benefit of time to ride the ups and downs of the market and in the long run you will achieve a higher return.

 

Tax Strategy

 

A sound tax strategy will help you keep more of your income to yourself, which results in faster achievement of your financial goals.  In order to develop a sound tax strategy you may need the help of a financial advisor or a very competent accountant who can become familiar with your particular circumstances.

 

Estate Planning

 

A well thought-out estate plan is a critical part of financial planning.  This is even more important as you accumulate a significant amount of wealth that you want to leave to your heirs in the inevitable event of your passing.

 

Insurance Planning

 

Another area where a financial advisor can be very helpful is figuring out your insurance needs.  One critical type of insurance that you need to consider is life insurance.  Because of the variety of life insurance products available, help from a financial advisor may be necessary.  In addition to life insurance you need to consider these other types of insurance:

 

• Home insurance
• Car insurance
• Personal Liability insurance
• Health Insurance
• Long-term disability insurance
• Long-term care insurance

Putting together all the elements of a comprehensive financial plan can be overwhelming, so most people tend to put if off.  However, this is essential to your financial success and you should not delay putting together a plan.  If you have trouble getting started, using the services of a financial advisor will help you get on the way to your financial success.

 

Independent Thought:

One can easily find insurance leads for life, commerce, marine and boat insurance online. It helps you in comparing different insurance services and choosing the right one for you. People with low or medium income range would like to look for personal or small business insurance leads. There’s also a new range of services being introduced by insurance companies and banks, which includes fraud insurance and renters’ insurance. Over the years, business users have also been interested in business life insurance usually provided by leading insurance companies and banks like deutsche bank.