Written Financial Plans are Invaluable

Stop what you’re doing right now.

Grab a piece of paper and a pen. (No smartphones! Pen and paper.)

Now, write the following words at the top of your blank page, centered: “2018 Comprehensive Financial Plan”

Am I making you uncomfortable yet?

Don’t worry… you’re in the same boat as a lot of folks I know. You may even be allergic to the task of financial planning.

But with January just around the corner, now’s a great time to take stock of what went well for you in 2017 and, more importantly, precisely how you’ll chart your course in 2018.

You see, you should stop thinking of yourself as an “investor.” Investing is only part of what you do… if you’re doing it right, that is.

Rather, start thinking of yourself as the captain of your financial future

Investing is the sexy part of that role.

But according to one financial firm’s recent commercial, there are two other parts to the all-encompassing role of Financial Captain – planning and protecting.

Those are the not-so-sexy parts. In fact, I personally find them downright boring. Absolutely necessary, but still, very… very… boring!

Raise your hand if you’ve ever found yourself getting childishly excited while talking through the riders on your long-term care policy.

Yeah, me either!

Raise your hand if you spend Friday nights calculating the differences in retirement withdrawal rates under varying inflation scenarios.

I’m willing to bet not many hands are up right now.

Most people I know enjoy spending time on investments – finding the best ones, buying and selling them, and tallying their returns. But far fewer appreciate the value of time spent on financial planning.

Yet, a successful captain must be well-rounded and equally focused on all major components of his role.

Think of investing as sailing. You must plan your route, which includes choosing a specific destination, charting a course, and making alternate plans for when things go wrong.

You must sail the ship, of course. That’s the fun, sexy, part.

And you must protect your ship – against anything, from mechanical failure to natural disasters to pirates.

Plan.

Invest.

Protect.

Think about it this way…

If you’re a silk merchant in England, expecting a shipment of goods you’ve ordered to arrive by sea on December 1… and by January 1 there’s no sign of it and no word from the ship’s captain…

Can you assume definitively that the captain doesn’t know how to sail?

Of course not!

His failure to arrive at port may be due to poor sailing skill, sure, but the failure might just as easily be attributed to poor planning, or his failure to protect the ship from pirates.

The captain’s sailing skills may have nothing to do with the failure to deliver.

The same goes for the “captaining” of your financial future, I think.

How much of a kick in the teeth would it be to be successful at investing, but still live a subpar financial life just because you failed plan and protect?

Would you believe that most people in America don’t have a written financial plan that accounts for each of these important areas?

According to a survey the Certified Financial Planner (CFP) Board of Standards commissioned:

  • 38% of Americans have a financial plan aimed at addressing one or two major goals (i.e. retirement or college savings), but “no comprehensive plan to put it all together.”
  • 33% of Americans have an even more limited financial plan, accounting for either one major savings goal, or a household budget, but not both. Further, they had no plans to develop a comprehensive financial plan within a year.
  • 10% of Americans have done “virtually no financial planning of any kind.”

That leaves just 19% of Americans who have a comprehensive, written financial plan.

The CFP Board’s study concluded that those with a comprehensive financial plan enjoy a number of benefits, including increased confidence in their financial decision-making abilities, increased success in saving money and meeting major savings goals, and higher incomes.

The study found that comprehensive planners reported higher confidence and satisfaction, regardless of their income bracket… proving that written financial plans are not merely luxuries of the ultra-wealthy.

The bottom line is… everyone should have a written, comprehensive financial plan!

Standard financial planning generally covers the following topics:

Goal setting, budget creation, establishment of emergency fund, debt payoff planning, retirement planning, planning for other major goals (i.e. college savings), insurance coverage and, finally, estate planning.

And while each of those is important, they’re somewhat outside the Dent wheelhouse, since we focus on unique, value-add investment research and services.

Services like my own 10X Profits, which we first launched this time last year.

10X Profits is all about trading volatility booms and busts… for BIG profits!

But, while my model has proven to be uniquely powerful, I still encourage 10X’ers to develop a comprehensive trading plan, which outlines precisely how they’ll implement it.

This exercise has transformed them from shoot-from-the-hip “investors,” to true “Captains” of their financial futures.

To learn more about 10X Profits and how to develop your own 10X Plan, click here.

It’s time for you to transform your financial future.

Adam O’Dell
Editor, 10x Profits

P.S. You heard everyone’s darling FAANG stocks lost some $78 billion on Wednesday?! Well, coincidentally, I included analysis on the FAANG stocks in the Special Report I just released to my 10X’ers. Guess what? My 10X Profits model generated annual returns more than 3-times stronger than the best “FAANG” portfolio. And the 10X model requires just two ETFs!

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In our new infographic What Killed the Middle Class?, we take a look at some shocking numbers to show how bad it’s become and what has been fueling this middle-class revolt.

 

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Categories: Investing

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.