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What Should Your Financial Plan Really Look Like?

How should your financial plan be structured? The graphic below shows an approach that I like to follow when working with clients (whether they are just starting out with very few assets, or quite established with significant assets). Please note that this is not representative of a comprehensive financial plan, nor is it meant to represent your unique situation. It’s simply a tool to help clients prioritize where to begin and how to deploy their assets most effectively. And where exactly do we begin? At the bottom:

In a nutshell, your financial planning life cycle falls into three phases:

  • Foundation: Getting organized, protecting against emergencies, and assessing your current financial situation.
  • Future: Identifying your long-term goals, and determining what you need to do to achieve them.
  • Finale: This is the final stage of your life, which includes managing your assets, liabilities, and expenses during retirement, and planning the rest of your life and beyond.


Nothing can be built without a solid foundation, especially a financial planning program. So we begin and build from here, because even the most disciplined savings and investment program can be derailed by an unexpected emergency or tragedy. Focusing first on your Foundation means that you become fully aware your current financial health, and can protect yourself, your family, and your income and assets. The two main areas in this phase involve Getting Organized and Protecting Against Financial Tragedies. At the end of this phase, you should know more about your finances than you ever have, and should have the confidence to make informed financial decisions moving forward.

Getting Organized

  • Assets & Liabilities: What if you had an inventory of every account, valuable, and property that you own, and every debt or liability that you owe one sheet of paper? It sounds simple, but it is an incredibly powerful tool that provides you with a total sense of control. You (and your team of advisers) now have an accurate overview of your Net Worth, and will have a much easier time working with your estate planning attorney to prepare your estate plan.
  • Budgeting & Cash Flow: After documenting your cash flow, you’ll know what money is coming in, whether is from trading online or something, and what is going out, which can help you develop a budget.
  • Establishing Your Team: Working with professionals can be an extremely efficient way to manage your financial life – accountants, attorneys, insurance and investment advisors, among others.
  • Employee Benefits Review: A fair amount of your compensation can come from group benefits, such as health insurance, flexible spending accounts, or retirement plan contribution matching. Have you taken the time to take full advantage, or are you leaving money on the table?

Protect Against Emergencies

  • Emergency Fund: This fund is essential to helping you react to unexpected emergencies – immediately. It is meant to provide instant liquidity for a lump sum emergency, and to replace income on a short-term basis if you lose your job or become sick or injured.
  • Insurance Review & Assessment: Just about everyone needs insurance – for different reasons. Long-Term Disability Insurance to replace your income if you are unable to work because of an illness or injury. Life Insurance to protect your family should something happen to you. Health Insurance to help defray the ever-increasing costs of health care. Homeowners, Auto, and Personal Liability Insurance to further protect you and your family.
  • Estate Planning: Formalizing your estate plan with one of the best Castle Rock lawyers
    allows you to formally maintain control over major life decisions. Who will care for your children? How will your assets be distributed? Who will make health care decisions, or sign legal and financial documents on your behalf? How do you want end-of-life decisions to be made? A basic estate plan includes the Last Will and Testament, Durable Power of Attorney, Health Care Proxy, and Living Will. However, it is recommended that you find an attorney who specializes in living trust in California, or a similar, more local option when it comes to writing the Living Will, as this aspect can be complicated. Advanced and multi-generational estate planning can include the use of trusts, life insurance strategies, and complex asset transfers.


We all want to start here; buy a home, send your children to college, and save enough for a comfortable retirement maybe trade forex too. Your future goals can be whatever you choose them to be. For example:

  • Buying a Home: How much home can you afford, considering all carrying costs. What financing options are available to you in the current dynamic environment? How do you effectively save for a down payment, and where should you keep it?
  • Saving for College: College costs continue to increase beyond the rate of inflation. How much will a public and private college cost when your child enrolls? What savings vehicles are available to you, and how will your assets impact financial aid eligibility?
  • Retirement Planning: Saving for retirement is just about the greatest concern and biggest goals of our clients. Something as important as late life planning should be taken very seriously. How much do you need to save, and what types of investment accounts are available to use for a long-term, disciplined savings and investment program.


Enjoying a comfortable retirement is just one of the many aspects of the final stage of your life. Now that you’ve arrived, your financial program still requires ongoing planning, management, and maintenance. For Boomers and Retirees, there are difficult issues and questions to face:

  • Retirement: Did you save enough? Will you need to work for supplemental income? Will you outlive your assets, and what steps can you take to prevent that from happening?
  • Long-Term Care: Have you considered the possibility that you may need some form of long-term care and living assistance? How will you pay for it?
  • Gifting & Asset Distribution: If you have a desire to share your estate during your life or after, have you updated your estate plan to reflect your wishes?
  • Legacy & Charitable Planning: Are you considering leaving some or all of your estate to charity, and if so, what vehicles are available to assist you in this process?

That’s the view from 10,000 feet in the sky. My experience in working with clients has proven to me that everyone’s situation is unique. It is helpful, though, to start at the bottom (your Foundation) so that when life delivers an unexpected and unwelcome surprise, you can be protected.