When discussing growing wealth through financial planning, we need to start with why this is important.
Why Financial Planning?
Financial planning is like any other area of our life that involves planning. Without a plan, we do not know where we are going or how to get there. This would be the same as planning a vacation trip without a destination, route or routes of travel, or means to get there.
The Desired Final Outcome
Wealth building put simply is eliminating liabilities and increasing in value the kinds of assets you acquire. Basically stated, liabilities are things that cost us money like debts, for example, and assets are things that have financial value and increase our net worth.
Checking the Plan
It’s also worth noting that we need to consistently check whether we are on the right track with our plans or if we need to adjust our course to reach our desired outcome. Here are some tools we can use to plan, check our plan, and adjust our course.
Tools that Can Help
- Daily, weekly, and monthly planners- Planners may not seem to relate to building wealth at first, but in the long run without some degree of organization, building wealth is not possible.
- Budget or Personal Profit Margin (PPM)– A budget or personal profit margin (PPM) helps keep us be mindful of what we take in financially, what we spend, and the balance we have left to invest in a vehicle that can create more wealth.
- Sources of information and education- It’s always helpful to gain knowledge and wisdom in regard to what to do and not do financially.
- Sources of inspiration- If you’re planning on building wealth for the long haul, it’s going to take some work. We all need some inspiration on the way in order to “stay the course.”
- A financial advisor where needed. Sometimes we need some assistance from someone who is close to what is going on. Financial advisors that work on a fee basis can help us where we lack insight or keep running into the same or similar problems.
Bringing It Together
When creating wealth we need to come up with a plan that will help us eliminate liabilities and increase the value and kinds of assets that we have. We need to consistently check our plan using a number of tools and resources to make sure we are on track toward our ultimate goals and adjust where necessary.
Your Takeaway
Do you have a overall financial plan to eliminate liabilities and increase your assets? Do you check your plan consistently in order to see if you need to adjust direction? What do you do well in regard to growing wealth through financial planning and what do you need to improve on and what is your plan for improvement?
This article was written by an SFM affiliate. If you would like more information on how to plan and create a business that can help you live the life you would love to live, check out this link:
