Wednesday, December 15, 2010

Financial Planning is Kinda Important

So now that reality is setting in, so is the nitty gritty reality of my financial plan.

As part of the severance I got from my ex-employer, there is an offer of services of a Financial Planner.  This is rather normal.  I’ve decided to use these services to the maximum so that 1) I can objectively decide how best to invest these new found funds; 2) I have a plan of which source of income to draw from in which order so as to minimize tax burdens, and 3) I know I’ll be able to eat when I’m 80 years old (ie. Won’t be a bag lady). 

The Financial Plan will include such variables as:  current investments, projected living expenses, estimated inflation rate, estimated rate of return on investment.  As well, we need to include:  vehicle replacements, home upgrades, vacation assumptions, donation assumptions, and anything else that will impact the sources of income and expenses.   Of course, there is always the possibility that I’ll end up working again.. (Say it isn’t so!!!!!!)

We all know this planning thing is the right thing to do…but have we ever really gotten into the details?  I know I started the process a few times, but never really had the concrete plan in my hands.  There were always some things on the periphery that couldn’t be or weren’t included.

There’s great peace of mind that comes when going through this process.  I highly recommend it for everyone, regardless of your financial or employment status.

It’s kinda like knowing that you need to get somewhere you’ve never been before, but you’re too lazy or rushed to stop to buy a map.  You can take a few side roads and detours, hoping like heck you don’t run out of gas.  Had you had a map, you could have gotten there more efficiently, and not had the stress of the unknowns along the way.

1 comment:

  1. Hmmm. Something to think about. I kind of like to leave some of the unknowns, well, unknown. And the planning process stresses me out. But, I know there are things we are missing that are important, so perhaps I should look into a meeting with a financial planner. (PS: I am generally a "follow the map" kind of person. :-)