loader image

There’s More to Financial Planning Than Just Having an Investment Strategy

Picture of Randall E. White

Randall E. White


Portfolio Returns are Only One Piece of Your Planning Puzzle

You max out your 401(k) contributions, you contribute regularly to your IRA and you’ve diversified your portfolio in order to reduce your overall risk. This is a thoughtful and strategic financial plan, right?

Well, not exactly. Although many people believe a consistent investment strategy sets them up for their desired financial future, the truth is that investing is only one piece of the puzzle when it comes to financial planning. If your investments are the only thing you’re being thoughtful and strategic about, you’re missing several crucial steps in protecting your financial future. Below we’ll discuss a three-part plan to help you discern where you may have holes in your current financial plan.

Part 1: Goal Planning

Regardless of what stage of life you’re in, you have short- and long-term goals. Maybe you want to get married and buy your first home, maybe you’re focused on getting the kids through college debt-free and buying a vacation home, or perhaps it’s your dream to retire early and travel the world. In any scenario, you can’t properly plan for the future until you know what you want. Once you’ve clarified your goals, you can devise a strategy to achieve them.

If you haven’t yet discussed your goals with a financial advisor, now is a great time to start. As you’re thinking through your goals, your advisor can help you navigate the best strategies to achieve them and discuss any trade-offs you may need to make in order to make the future you see for yourself a reality.

Part 2: Personal Financial Management

An important step in financial planning is to build your discipline when it comes to things like keeping a monthly budget, controlling spending, and paying down debt. Some people are born with financial discipline to spare, but most people need to practice these skills and continually work on self-control when it comes to money management.

Of course, this doesn’t simply mean following a budget and using any excess cash to pay down debt. Should you do this with high-interest debt like credit card debt? Absolutely. Should you take this same strategy on “good debt” like a mortgage? Probably not in the current low-interest-rate environment, at least from a purely economic point of view. Debts like mortgages that have low-interest rates can be paid back more slowly, allowing you to leverage your dollars to accomplish other financial goals in the meantime. Your financial advisor can provide you with savvy guidance on topics like this, too.

Step 3: Protecting Your Assets and Income

Life is full of the unexpected and, though you can’t plan for every possible contingency, it’s smart to ask yourself a few “what if…” questions and put protections in place. For example, if you become disabled and unable to work, having disability insurance could be a lifesaver. Similarly, if you have a family relying on your income, life insurance is a must-have to avoid putting your loved ones in debt when you die. Depending on your circumstances, you may also want to look into things like long-term care insurance or umbrella insurance. No one escapes this life without a financial surprise or two, so think through the possibilities and determine where to hedge your bets.

What About Investing?

Certainly, your investment strategy plays a key role in your overall financial future, but forgetting to focus on the whole picture could leave you vulnerable and hinder you from reaching your goals. Follow the steps above – possibly using the expertise of a trusted financial advisor along the way – and you can be sure to maintain a well-rounded financial plan that doesn’t leave anything to chance.

If you don’t yet have a financial advisor in your corner, please contact us today. We take pride in partnering with our clients to understand their goals and motivations and to help them develop sound financial plans suited to their unique needs.

Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.

Join Our Mailing List

Take control of your financial future and stay one step ahead with our valuable resources. Sign up today and start your journey towards financial success.