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Financial Planning Points of Consideration

What isn’t overtly shown or said is usually overlooked.

Resources are limited and wants are unlimited.

The future is unknown, so life gets messy.

If it can break, it will.

Urgency is usually imprudent.

Preferences change.

Integrity, honesty, and patience are rare.

Understanding wanes.

Left unchecked, spending expands with earnings.

“Opportunities,” banks, and the IRS target wealth.

Financial Planning Principles

Simplicity is durable. Complexity is fragile.

  • Simple is actionable and powerful.
  • Refine your strategies to their most basic form.

Get advice and accountability from advisors to simplify decisions and take action.

  • Time, Energy, and Focus are some of your most valuable assets, so avoid wasting them.
  • Accountability is how progress is made.

Review your personal financial statements regularly.

  • Cash flow statement, balance sheet, and changes in capital statement, etc.
  • Forecast the impact of future expenses.
  • Determine what to postpone and what to advance.

Rapidly repay third-party debts.

  • The magnitude, or quantity, of interest paid is a better measure of debt’s financial consequence compared to the stated interest rate.
  • There are tremendous financial and non-financial consequences for carrying debt to someone else.

No plan is perfect, so have a maintenance plan.

  • Increase the degree of certainty whenever and wherever possible.
  • Account for a margin of error.

Execute the best plan given the prevailing conditions.

  • There’s a time for capitalizing and a time for investing, a time for expanding and a time for contracting, a time for pruning and a time for replenishing.

It’s impossible to know and understand everything.

  • Start small.
  • Behavior is more impactful than timing.
  • Paralysis by analysis is an extremely efficient way to waste time, energy, and focus while pacifying the need to act.
  • The unseen cost of avoiding decisions and delaying actions is wasted time, energy, focus, and forgone results.
  • There is no perfect time to start, and it’s impossible to understand everything, so have faith and start doing.

Patient capital attracts high-quality opportunities, while urgent capital chases low-quality opportunities.

  • The control of and access to high-quality capital relieves 99% of all stress and allows for lucid, more creative thinking.
  • Capital quality varies depending on the characteristics of where it’s stored.
  • Grade your capital based on a well-thought-out list of favorable characteristics.
  • Progressively increase the amount and quality of your capital.
  • The ability to participate in the opportunity of a lifetime, like buying a business or rental properties, is limited to the access and control of high-quality capital in the lifetime of that opportunity.

Speculating is not investing, and investing is not saving.

  • Prioritize regularly saving capital (capitalizing) over investing.
  • The right capitalization strategy reveals increasingly higher quality opportunities that leads to the right investment strategy.

Save capital somewhere out of sight and out of mind.

  • Let capital compound, and don’t interrupt it unnecessarily.

Save bountifully and you’ll have abundant capital. Conversely, save sparingly and you’ll have scarce capital.

  • The ability to maintain ownership of businesses or assets throughout a period of income disruption is limited to the access of high-quality capital.

Build or buy 7+ ways to generate cash flow now and in the future.

  • Active Real Estate and Businesses, Passive Real Estate and Businesses, Life Insurance, Annuities, Portfolio Investments, etc.
  • Build and buy businesses you have a passion for and understand.
  • Become a discerning investor that identifies high-quality investment opportunities.
  • Build or buy your verticals.

Leave a financial and nonfinancial inheritance for future generations.

  • Give how you see fit.
  • Give to loved ones.
  • Give to a charity. 
  • Give to a cause.