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Investments Aren’t Enough – Why You Need a Strategic Financial Plan, Too Thumbnail

Investments Aren’t Enough – Why You Need a Strategic Financial Plan, Too

Laurence Hale, AAMS®, CRPS®
Principal/Managing Partner, Investment Advisor & Chief Investment Officer

Making investments without a strategic financial plan is like making payments on a luxurious home to enjoy in retirement without ever knowing where it is, how to get there, or how to avoid the potential roadblocks along the way.

And yet, investing without a plan is surprisingly common. If you’re making investments (or your financial advisor is on your behalf) but you don’t have that plan in place, you’re doing yourself a disservice. The fact is, you’re really only halfway to making your financial and life goals a reality. 

Here's how to begin building out that other critical half of wealth building – your own strategic financial plan – to get you on solid ground and on a clear path to where you want to be.

First, Understand What Financial Goals Are 

At first glance, this section may seem a little silly. The definition of financial goals seems self-evident. But sometimes it's easy to only look at the money-related goals (wanting to save $20,000 this year) and not the money-required goals that accompany the rest of your life (buying a house, taking a sabbatical from work, or funding your dream vacation).1

When you start to identify some of your financial goals, it's important to figure out which goals fall under short-term financial goals and which of your goals require a more long-term plan. In general, short-term goals are defined as any goal that will take three years or less to complete, while long-term goals may take three to five years to complete, or even longer.

Why is it important to identify a time frame for your goals? If your goal is to have $10 million saved in your retirement account by the time you're 65, it can be hard to stay motivated for a goal that feels so far away. By having a mix of short- and long-term goals you'll be able to build up successes that will keep focused and motivated for those goals that will take a little longer.

Next, Get Clear About YOUR Financial Goals

 Now it's time for the real work. When it comes to identifying your financial goals, leave no stone unturned in every area of life. What does your dream life look like, and how similar is it to the life you lead now? Where are the disparities? Most importantly, are you and your life aligned with your current financial goals? And if not, what do you need to do to close the gap?

The importance of getting clear about the kind of life you want to live and writing it down is two-fold. First, you'll have a written record of what you want to do rather than have ideas floating around in your head. Again, this seems like a simple tactic, but it makes all the difference to see your goals in writing in the physical world. Once they're down on paper, you can start to examine which parts of your life match, which ones don't, and start to close the gap. The second reason is that having something to hang onto is important when the going gets tough. Life happens, and without fail there will be some speed bumps along the way. Writing down your goals can keep you focused when the road gets rocky.2

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Then, Set SMART Goals for Your Finances and Future

 Now that you have your goals and dreams written down, it's time to figure out how to make them a reality. Sometimes this is an easy thing to do, like canceling a subscription you no longer use, or calculating how much it will cost to spend two weeks in Bali.

One of the easiest ways to turn your goals from dreams to reality is to use the SMART goal method. SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. By applying this metric to each of the goals you've defined above, you can create a simple plan for each one.

Let's use the example of saving for a trip to Bali. A few actions that you can take is to find the best time of year to travel to Bali, research the costs of flights and accommodations, and decide what activities you want to do when you're there. But that doesn't necessarily mean that you have an actionable plan to make this happen. 

Smart Goals graphicHere's how we can apply the SMART method:

  • Specific: I want to save for my dream vacation in Bali. I have estimated this trip will cost $5,000.
  • Measurable: Broken down, this means that I need to save roughly $97 per week or $388 per month. 
  • Achievable: My current budget has $1,000 of disposable income per month, which allows me to set aside the required funds.
  • Relevant: Based on my income and expenses for the past year, this should be achievable.
  • Time-Bound: I want to achieve this goal within the next year.1

Now that you have identified a SMART goal, it's time to get started. Make it as easy as possible to save by setting up automatic transfers to a special savings account that you know you won't dip into. Track your progress, celebrate your wins, and know that a year from now, when you're lounging on a pristine beach, you'll have proof that you can set and achieve your financial goals.

Finally, Use Those SMART Goals As Building Blocks for A Comprehensive Financial Strategy

Whether it's paying off debt, saving for retirement, funding education or your dream trip, setting SMART financial goals will help you build the life you've always wanted. They are the building blocks to your dreams but remember that you must also consider the picture as a whole. This is where working with a strategic financial advisor can make all the difference.

At WHZ, we don’t just make investments for our clients – in fact, it’s almost never the first thing we do for them. Our first step is to get to know them, what their current circumstances are and what their goals are for the future. We help them to define those SMART goals for themselves, but then we go one step further and use them as building blocks to help pave the most direct path possible to achieving their long-term dreams – and we’re there to help them stay on that path when the unexpected occurs.

If you’re ready to go beyond just investing and see the difference that a strategic financial plan and partner can make for you and your dreams, contact us and see how our Plan Well. Invest Well. Live Well.™ strategic process can empower you to pursue your goals with confidence.


Authored by Principal/Managing Partner Laurence Hale AAMS, CRPS®. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your representative. Weiss, Hale & Zahansky Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084. 860-928-2341. www.whzwealth.com.  

1. https://www.thebalance.com/best-financial-goals-2385552

2. https://www.inc.com/geoffrey-james/what-goal-setting-does-to-your-brain-why-its-spectacularly-effective.html

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