{"id":497,"date":"2011-06-16T15:57:34","date_gmt":"2011-06-16T15:57:34","guid":{"rendered":"http:\/\/vhfinancialmanagement.com\/?p=497"},"modified":"2011-06-16T15:57:34","modified_gmt":"2011-06-16T15:57:34","slug":"your-financial-puzzle","status":"publish","type":"post","link":"https:\/\/vhfinancialmanagement.com\/2011\/06\/16\/your-financial-puzzle","title":{"rendered":"Your Financial Puzzle!"},"content":{"rendered":"
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What is financial planning? Ask that question to the average Joe or Jane and the answer is usually centered on investments. Even some financial planners may operate with an investment centric model, but I don\u2019t. Here\u2019s why!<\/p>\n

The Puzzle<\/p>\n

I often equate financial planning to a giant puzzle. Each puzzle piece has an impact on the big picture.\u00a0 With only one piece missing the picture is still intelligible, but, if several pieces are missing, the picture becomes harder to recognize. Similar to the puzzle, each piece of the financial plan makes up the entirety of the plan: therefore, every piece of the financial plan matters and should be managed accordingly.<\/p>\n

As a holistic (comprehensive) advisor, It\u2019s important for me to see the big picture (the entire puzzle) for my clients. I understand how each section of my clients\u2019 financial world can impact the entirety of the plan. For example, investing may impact taxes, which may impact cash flow, which may impact debt reduction or wealth accumulation. On top of that, all of these things may impact your quality of life or quantity of sleep!<\/p>\n

Where do I start?<\/p>\n

While most people start a puzzle in the corners or edges, I suggest a bit of a differing approach to planning. I feel it\u2019s important to start with the piece that touches almost every other piece: taxes. Taxes are the center of the puzzle and are the glue that holds the financial plan together\u2026..or rips it apart. Taxes must be taken into account for almost every financial decision\u2026.good or bad.\u00a0<\/p>\n

Just as a single puzzle piece can\u2019t fully illuminate the puzzle\u2019s picture, a single topic of financial planning can\u2019t be construed as a comprehensive financial plan. Every piece should work hand and glove. If not, the plan becomes inefficient and potentially dangerous.<\/p>\n

Once a puzzle is completed it doesn\u2019t change, unless disassembled. Financial plans differ and are constantly changing\u2026..life happens. This is another reason I enjoy my work. The ebb and flow of life should force us to review our plans, but most folks simply handle their personal finances reactively and deal with issues as they arise. This is very dangerous. My work with clients allows me to constantly massage our plans and keep our financial plan in step with life\u2019s constant changes.<\/p>\n

Is your financial plan similar to a puzzle right out of the box\u2026.scattered? Do your personal finances work hand in glove? If not, you should reevaluate your planning method and strive to connect the pieces and take a look at the big picture.<\/p>\n

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