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financial planning Biblical wealth management

Last week I covered the 12 different areas of financial planning I personally see on a daily basis that need addressing. This week I will finish up with Biblical financial planning by covering the 5 steps to set and achieve your financial goals.

Step 1 – Choose a well qualified team that works together – Proverbs 15:22

A financial planning team consists of a group of well-trained individuals in a broad variety of wealth management subjects. This team consist of a certified financial planner, a registered investment advisor, an accountant, a bookkeeper, an Estate planning attorney, an insurance professional/property and casualty agent/health and disability specialist, possibly a trust administrator, and a planned-giving specialist in Charitable giving. The head of the team is usually a captain that is highly experienced in all facets of financial planning and oversees and carries out all of your ultimate financial goals. Some of these team members may in fact cover more than one facet of your financial planning needs. Trusting a team, rather than an individual, with your finances is the best way to insure a well-rounded financial plan.

Step 2 – Gather all the Information

This includes everything financial. Example: the last 3 years of personal, business and trust tax returns, all bank account statements for the last 6 months, quarterly investment statements for the year, a listing of all assets and liabilities (updated financial statement), all insurance policies (life, health, disability, umbrella, auto and property), all mortgage and debt statements, all existing estate planning documents (wills, trust, limited partnerships) plus business documents if you own a business. This can be tedious, but you’ll need to see exactly what you have in order to begin planning the future of your finances.

Step 3 – Analyzing all the Data

Each member of the team described in step 1 will analyze all the data and make recommendations to fulfill your future plans and goals. Financial planning involves many important decisions and actions that can take years to fulfill. Whether you are first deciding on how you will plan your finances and your future, or you are updating your entire financial plan for todays climate, it takes a lot of time and research. Note: it has been said many times over my 29 year career that many people spend more time planning more for their vacations than they do for their financial futures! Be patient during the planning of your finances. You don’t want to rush if you want to get everything right.

Step 4 – The Team Makes Recommendations

After several meetings with the different team members, and after they have met to discuss and analyze your data and goals, the captain of the team will present all the recommendations. You will want to listen and absorb all of these recommendations. Take this step seriously, you will be making big decisions based on this advice.

Step 5 – Decide and Implement

Once you’ve been given all the options and recommendations it is time implement or update your existing financial plan. You’ve signed all the necessary documents, you’ve acquired any necessary insurance, you’ve re-allocated any other investments, and you can finally take a breather.

Periodically, your financial team will need to cycle through all the above steps. Doing this allows for making any necessary changes in your financial planning. The economy, culture, and stock market are constantly changing. Many times you’ll even change what your ultimate goals are. Sometimes “life changes” like the passing of a family member or the discovery of oil and gas on your property will force you to make financial changes. It’s important to re-evaluate your financial planning decisions every several years and do at least an annual review to assure your on the right path.

What you ultimately must understand about financial planning is that it is a lifelong process, not a product. New financial milestones and new financial worries will arise in every stage of life, thus financial planning is always evolving and changing with your situation. Many people try to do the complex deed of managing their own finances. While it is possible, it’s really most beneficial to trust a highly-trained financial team to carry out all your goals.

Any questions or comments are welcome.