October is National Financial Planning Month. While October also celebrates National Chili Month, I’d argue that focusing on your financial situation and building a solid investment plan is equally worthy of recognition.
There’s nothing magical about October for financial planning, but it’s an excellent time to start—what matters is that it’s now. When working with clients, I want them to be as informed as possible so we can achieve the best results for their specific needs. We’re problem solvers. Together we analyze all known variables, provide outcome probabilities, and create solutions specific to your situation and preferences.
Multiple thoughtful conversations are needed to fully understand your situation and help you understand the important variables and how your choices affect outcomes. Here are some key questions to think through before we meet so we can discuss them together and create a customized investment plan.
What’s the Goal?
Do you have plans for the future? Looking to grow a college fund, take an amazing trip, or build a nest egg? Every family is different, and so are your goals and ambitions. Consider your plans for both the near and far future so we can build a strategy tailored to your timeline and priorities.
What’s the Risk?
There are two important strands to risk in determining your investment approach:
- Financial risk: How much risk can and should you bear given your particular financial situation?
- Emotional risk: Your personal tolerance for risk is tied to your money history and personality. This is especially important when managing finances for loved ones.
The best way to determine both is to discuss it with your advisor, who will listen to your situation and offer professional expertise.
What’s Your Income?
Beyond your primary household income, consider returns on other investments and tax management. Look at the best strategy for your situation, especially regarding tax rates and taxable investments. Your income affects your risk level—your family’s standard of living is a central consideration in these strategies.
What’s the Deal with Your Taxes?
You’ll need to review your tax situation and any special circumstances. As an advisor, I help clients utilize their investment portfolio strategically and manage assets with tax advantages in mind. This may require conversations with your accountant or attorney, but it will be invaluable when creating your financial plan.
What’s Your Wealth?
Think about your pension value, businesses, employee stock or compensation, potential inheritance, and other liquid or illiquid assets. All of these play a part in designing an investment portfolio right for your family. Have your planner help analyze your entire financial profile to ensure nothing is missed and to understand your true economic risk.
What’s Your Timeline?
Planning a timeline is an important part of your strategy. Think about your expectations: Do your goals need to be met in 5, 10, or 30 years? Do you need to generate income at a specific time? Can you handle loss and fluctuations, or is stability key? Discuss your expectations with your financial advisor.
How Accessible Should Your Assets Be?
Liquidity determines how quickly you can access your assets. If you’re building an inheritance or long-term fund, liquidity may be less important—you could consider real estate, antiques, private equity, or other illiquid investments. If you need active access, choose investments with many buyers and sellers (like mutual funds or bonds) that can be converted to cash quickly at fair market value.
Getting Started
This may sound like a lot to remember, but don’t panic. The key takeaway: You and your financial advisor need to know everything about your financial life—all income, assets, investments, employee benefits, and personal details.
While it sounds daunting, it doesn’t have to be. Set aside a day or weekend to get started. Ask your spouse or a trusted friend to help you break down these numbers so you’ll have a clear picture of where you stand.
Start a conversation with us to discuss how we can help you create a customized investment plan tailored to your unique situation and goals.
