Do I need a financial plan?

 I would like to address the question, "Do I need a financial plan?"

I am going to give you an answer that might surprise you...

The answer is No.

Let me give you a hypothetical scenario:

What if you were a 40yr old had $5m in liquid net worth?

From a financial planning perspective, is this person doing well?

Most people would answer “YES!”

Now, what if this same 40yr old inherited $100m two years ago?

In this example, they had burned through 95% of their inheritance in two years.

Now let us re-ask the question, how is this person doing?

Most people would answer “probably not so well."

You see the problem with a financial plan is that it only tells you where you are at today.

There is no concept of where you have been.

In fairness, it should tell you the appropriate next steps of where you need to go.

The value is not in the plan.

The value is in the ongoing planning.

As soon as a financial plan is put into place, it is wrong.

Now, we hope that we are less wrong by having a plan than by not having one at all.

We believe that the ongoing monitoring of the plan is where the magic happens.

To make adjustments & course corrections.

The planning must be greater than the plan.

Do you need a financial plan? Not really, but you do need ongoing financial planning.