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Planning a Successful Future: Managing to Be Wealthy for Individuals and Their Advisors

ISBN: 978-1-119-06912-6
240 pages
March 2016
Planning a Successful Future: Managing to Be Wealthy for Individuals and Their Advisors (1119069122) cover image

Description

A deeply insightful guide to goal-based financial planning and wealth management

Planning a Successful Future empowers advisors and clients to take control of their money and manage their income to achieve their financial goals. Written by the father of fee-only financial planning, this book features real-life stories and examples from over three decades in the industry to illustrate how financial planning works and the best way to create your strategy. You'll learn how to identify and prioritize your goals, and why they're important—and how to get where you need to be for retirement, education, home ownership, and more. Practical exercises get you started on the right track, and useful checklists keep you organized and focused along the way. You'll get expert insight on risk management, allocation, tax reduction, estate planning, and more, as you develop your strategy and put it into action.

The financial services industry undergoes frequent changes, and financial planning specifically is affected to a high degree. Keeping up with the latest news and distinguishing trend from legitimate methodology can itself be a fulltime job. This book gives you the background you need to create a plan, and make the smart choices that will help you grow and protect your wealth.

  • Create a realistic and goal-based financial plan
  • Take a more proactive approach to your finances
  • Identify your goals and how to achieve them
  • Allocate investments appropriately for your situation

Financial planning is complex, with many variables to analyze and outside forces that can derail even the best laid plans. Planning a Successful Future gives you the information, tools, strategies, and insight you need to make the best decisions for your financial future.

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Table of Contents

Acknowledgments ix

Preface xi

Introduction 1

Creating Your Financial Plan 2

How Does This Relate to Investing? 3

Are You Meeting Your Goals? 3

Obstacles to Reaching Financial Goals 4

Fuel Your Goals with Income 6

Developing Your Plan 7

Attaining Peace of Mind 8

Chapter #1 What Do You Want? 9

Put It in Writing 9

Six Steps to Financial Freedom 10

Start Planning 13

Other Goals 18

Review Your Plans with Your Family Members and Advisors 18

You Know What You Want 19

Chapter #2 What Do You Have Now? 21

Materials 22

Information You’ll Need 22

Filing the Information 22

Looking for Missing Financial Information 24

Understand What You Have 25

Cash Flow Planning: When, Where, and How Much? 26

Plan Your Future Cash Flow 34

Plan Your Cash Reserve 34

Balance Sheet: What Is Your Financial Worth? 43

Chapter #3 Retirement 51

Review Your Retirement Goals 52

Your Cash Flow Worksheet Is Crucial 52

Assumptions for Retirement Planning 53

But What About . . .? 62

Chapter #4 Planning to Send Your Children to College 67

How Much Will a College Degree Cost? 67

Where Will You Find the Money? 68

Review Your Goals 70

Who Controls the Money? 71

Effects of Tax Laws on Your Education Goal 72

Income Shifting to Save Taxes 75

Chapter #5 A House Is Not Always a Good Investment 81

The True Cost of Home Ownership 82

A House as an Investment 85

Shopping for a Mortgage 90

Saving Money on Your Mortgage 94

Buying and Selling 98

Chapter #6 Insurance 101

Types of Life Insurance 101

My Recommendation 105

Types of Insurance Companies 106

Tax Considerations 106

Disability Insurance 109

Chapter #7 Liabilities 115

Good Reasons to Borrow Money 115

Bad Reasons to Borrow 116

Types of Credit 117

Chapter #8 Taxes 125

Four Methods for Reducing Taxes 125

Tax Tools 131

Chapter #9 Investments 137

Financial Basics 138

How the Financial Cycle Works 141

Your Investment Goal 143

Evaluating Risk 143

Investment Triangle 146

Investment Strategy 148

Investment Choices 152

Common Investment Mistakes 160

Other Investments 165

Chapter #10 How to Find and Work with a Financial Planner 171
Tyler V. Cook

What Is a Financial Planner? 171

Exposing the Myths 174

How to Find a Financial Planner 175

Chapter #11 Financial Planning for Women 179
Kimberly E. Wirtz

Learn About Family Finances While You Can 180

Understand Your Assets, Where They Are, and Who Legally Owns Them 182

Consolidate Accounts 182Name Primary and Backup Beneficiaries 183

Understand Pension and Social Security Arrangements 184

You Need a Will, a Living Will, and Two Powers of Attorney 185

Both Spouses Need Life and Disability Insurance 186

Balancing It All 188

Chapter #12 Financial Planning for Business Owners 189
Stephen Lukan

Business Structure 190

Turning a Hobby into a Business 191

Tax and Retirement Planning 192

Building a Team 193

Business Partners 194

Succession Planning 195

Chapter #13 Financial Planning for Physicians 197
Bhagwan Satiani

Reasons for Bad Financial Decisions 198

Results of Financial Mistakes 198

Chapter #14 Learning from Professional Athletes’ Mistakes 207
Lawrence Funderburke

Holes in Their Pockets 208

Inexperience Hurts 209

Learn from Their Mistakes 209

About the Contributors 215

About the Author 217

Index 219

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Author Information

JOHN E. SESTINA is president of John E. Sestina and Company, a private professional financial planning firm that counsels individual clients on an objective fee-only basis. The firm's guidance to clients throughout North America includes cash flow management, investment management, tax planning, disability planning, education planning, retirement planning, and estate planning.

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