Financial Planning is not about the money itself. It is about what the money will do in your life. This video will highlight why you DO NOT get financial security by paying off debt and safe investments. It comes from having a huge nest egg.
If you prefer to read, here is the transcript:
Question: From your experience, how do people really benefit from financial planning?
Financial planning is not about the money itself. It’s about what the money will do for you in your life.
A plan is not a bunch of numbers – it is about your life. Our clients find that our planning meetings are actually fun.
For example, we ask clients: “What’s important about money to you?” The #1 answer we get is security.
They want to know there will always be enough income for their family, for emergencies, or for things important to their lifestyle.
A plan can help you and your family achieve financial security.
Question: Can’t they get financial security without a plan?
We find most people that want security do exactly the opposite of what they need to do to get it.
The common mistake people make is to think they can be financially secure by paying off debt and having safe investments.
We call it this the Zero Plan. Their goal is to retire with zero debt, zero investments (nearly), and zero income (except a bit from the government).
Investing very little money and buying low return investments means you never build up much of a nest egg.
Real security: comes from having a huge nest egg.
I’ll give you a simple example. Who is more secure?
- Person A: With no mortgage or.
- Person B: With a $200,000 mortgage and $1 million in investments.
That’s what real financial security is.
Question: How do you get financial security then?
Building a nest egg probably means you need to invest in the stock market.
It does not have to be scary, though. You can invest successfully and safely in the stock market. Here’s what you need to do:
First, you need to think long term. The growth of the stock market has been quite consistent if you invest long term.
Second, you need a solid investment strategy. Our strategy is to hire the world’s best investors. We call them, “All Star Fund Managers”. Knowing they are investing for us gives us confidence.
Third, you need a long term, written plan so you know what you are doing.
Fourth you should work with one financial planner you trust.
In short, you do NOT get financial security by paying off debt and safe investments. It comes from having a huge nest egg.