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Financial Planning and Investment Strategy, Casual or Well-Organized? – The Financial Preserve from Lonier Financial Advisory LLC
Conscientious Financial Planning and Retirement Income Management | 201-741-9528
from Lonier Financial Advisory LLC, Osprey, FL

Financial Planning and Investment Strategy, Casual or Well-Organized?

Financial Planning and Investment Strategy, Casual or Well-Organized?

Planning and saving—along with earning—are the steady legs of our financial lives. On the face of it, all three are basic, and simple. Earn money, save some, and plan how and when to spend it.

For some, saving—investing—is as straightforward as buy low, sell high, or perhaps just keep it safe, somewhere secure, earning as much interest as safely possible. Others are more involved in saving and investing, choosing different funds and maybe stocks for retirement and taxable accounts.

Similarly, some approach financial planning casually, toting up their savings and matching future needs for education or retirement in their head, sensing either the fit is OK or maybe so far off, they’d prefer not to know the details! Others may have spreadsheets all factored out for each child, second homes, and their retirement.

In other words, you probably fit somewhere along a scale of casual to well-organized for investing, and casual to well-organized for financial planning, regardless of how much you earn. And you might be the rare person who has devoted the time and effort to learn about and do both in a well-organized way—all while busy earning the money to keep the lights on!

Financial Planning Sets the Stage for Investing
If you know about investing, what is its relationship to planning, except that you should spend as wisely as you invest? And if you are an organized planner, what is the relationship of planning to investing, except that you shouldn’t lose money in your investments?

We all recognize we need to save for the time when we will no longer be working. Even if we are very high earners, if we spend our income and save little or nothing, we will have little to live on when we are no longer earning. For those who have a large income, this can be a bigger problem than for those who live more modestly during their working years, so the need to invest for your non-working future applies to everyone.

A financial plan is the blueprint for your savings and investments. Without a solid plan, your savings and investing will not produce the results you are hoping for, the results that you need to support your future goals. Imagine ordering a truckload of lumber (what kind, sizes, lengths, quantities, etc) to build a house without having a blueprint to plan the order, yet alone to do the actual construction.

Saving and investing without a financial plan is like building a house without a blueprint. Houses in your neighborhood may look a lot alike, and all have a living room, kitchen, dining room, bedrooms, bathrooms and so on—and you need all that. But your family and the family next door are different, and have different needs. Maybe you’ll be far more comfortable with a couple smaller bathrooms than a big one in the hall, or you need an office area, or want to have a wine cellar or workout room. If these needs and wants are not in the blueprint, they won’t be in the house when you ultimately move in.

So you understand about investing and the market, and you’ve done OK with a few funds and stocks. After all, financial news makes up a good part of the news media. And you’re friendly with your financial adviser (broker), who always has good ideas. Who needs a plan?

Investing Designed for Your Future
You’ve heard it so often you either tune it out or have turned gun-shy: Investing involves risk. A financial plan that forecasts your resources and income needs in your non-working years is the best tool you can have to manage risk. With it, you can understand how much you need to save and how best to invest it with the least amount of risk you can safely afford to provide for your future needs. Otherwise you may keep you money so safe it will not grow enough to support you when you need it, or you may take on so much risk that it has declined too much in a downturn just when you need it.

Investing without a plan is shooting at a target without taking careful aim. There are tons of off-the-shelf investing strategies out there, and one might fit you pretty well. But how do you know? Your financial adviser/banker/broker offers name brand assurances, but where will they be if it doesn’t work out for you years later? And how much do they really know about your specific needs and financial situation? Even if you end up picking an investment strategy off the buffet table, you still need a financial plan to know which bits, and how much of each, to put on your plate.

Planners and Advisers
There are financial planners who focus on your financial model and then point you in one or more directions with general recommendations for investment strategy and implementation. Investing may not be their strong suit; cash-flow, budgets, debt management are their focus. Likewise, many investment advisers (BTW, the 1940 Investment Advisers Act specifies the ‘-er’ spelling) are very knowledgeable about investment strategy, but are not financial planners. They may even take a very narrow slice of your overall savings and not  look across all your accounts, not provide holistic management.

Both may be fee-only and uphold fiduciary standards, which separates them from their financial advisor/broker/agent brethren who make money selling you financial products. Some advisor/broker/agents are also planners or investment advisers, operating on an inherently conflicted (but legal) hybrid model.

It can be a complicated business.

Full Life-cycle Financial Planning
More than holistic investment management, I practice full life-cycle financial planning as the necessary foundation for strategic investing. This means understanding your full economic situation wherever you are along the path—early, mid-career, pre-retirement, recently, mid-retired, or legacy-oriented—and designing an investment strategy most suitable to you and your needs and wants. One that will change with you as you move along the path. Funding goals. Creating an income floor for your non-working years. Accumulation and distribution in the jargon of the planning profession, optimized for your circumstances.

Simple enough. You could do it yourself if you have the time and inclination. But you may be too busy, justifiably, earning a living and building your life. You are already saving in your 401K or IRA. But you could do better if you had a plan with an investment strategy tuned to your goals. Or you are fast approaching retirement and the methods you’ve used for decades no longer seem to make as much sense as you change from saving to paying yourself in retirement. It makes sense to have a plan.

My services organize and simplify your financial life. I analyze your situation and create a financial plan matched with an investment strategy that will help you gain the confidence and peace of mind to reach your goals and live your life more fully.

You can implement the plan yourself, and manage your savings and investments on your own. Or I can manage your investments for you, following the plan. You may find that the discipline of my managing your plan works better for you than your having to deal with the daily ups and down of the market on your own.

My mission is to provide trusted, prudent financial planning and investment strategy at an affordable price, supported by the powerful tools and investment options available today that make low-cost planning and investing possible.

If I can help, give me a call (201-741-9528) or send me a note. We can talk about your goals and concerns and how I can help.




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