Bursting the Myth of Financial Planning (1) – What it is really about

road mapping lastThere are those who travel and those who are going somewhere. They are different, and yet they are the same. Successful people have this over their rivals: they know where they are going.Mark Caine
They live their lives on purpose – they plan in advance and implement their plan along the way.

Financial planning is about planning; it is not about financial products. However, many people have a misconception when they hear about it. They think it is about financial products that financial advisers/planners are running behind them to sell.

In fact, financial planning is about developing strategies and following through based on our own unique priorities to achieve what is important to us. It is about people and their financial wellbeing now, and in the future. As you can acknowledge that every great accomplishment has a sound strategy behind it. So do financial planning. Imagine, what would your life be like if you had a financial strategy based on what was truly important to you?

To develop a financial plan, understanding your current situation, resources, your goals and values becomes very important part of the process. Then we look at to see whether there is any gap between where you are now, and where you want to be in the future, if there is any, then tailored made strategies will be developed and implemented to remove that gap. It is a very process driven and disciplined approach to accomplish what you want for your future.

Yes, we, financial advisers/planners, use and recommend financial products especially when we see a need in implementing strategies on behalf of you as a client. However, it does not mean financial planning is about financial products. Those products including property, shares, fixed interest products, insurances, superannuation funds you name it, are just financial means to help you set up and achieve your value based goals.

You might think some people do not have a plan, or any particular goal. Actually, when we think what we would like to set out to do with our lives, I can tell you, we often make a “bucket list” for objectives and then apply ourselves to achieving those objectives by utilizing certain instruments or tools. I call it “an informal way of planning.”

In general, some of our goals might take such a short term -like less than 12 months- to be achieved while others take longer. That is why having a properly tailored plan creates our financial road map for success. As it keeps us focus on our ultimate purpose.

Just remember; we, human beings, like consumption products move from one life-cycle to another until we die. Hence, we need planning for each of our life-cycles if we want to cruise throughout smoothly. As you can imagine, a person’s financial and lifestyle needs can be different at the age of let’s say 29 compare to at the age of 39, 49 or 58. Even financial planning needs of both a single person and a couple at the same age can be different. That is why setting in place some personal objectives and arranging financial means to satisfy those objectives in the short, medium and long-term becomes important. It is about understanding what is really important to us, and how to accomplish them more effectively.

At the end of the day, it is your life. You choose how to play in your life either reacting to events when they appear, or taking proactive approach by designing and implementing your plans.

Halle Yilmaz is a financial adviser and business consultant. As a financial adviser, she gives solid advice that can create rapid and lasting results for her clients. Sign up for her free E-Book and download “7 Steps to Healthy Wealth Management.” Follow Halle on Twitter @halleyilmaz

Leave a Reply

Or Connect with: