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Get Started :  Financial Planning

To be a successful investor, you need to know where you want to go, and you need a road map that shows how to get there. What I'm talking about, of course, is a financial plan -- something more and more of my clients are finding can be of substantial benefit. With a carefully designed financial plan, they feel they have better control over their assets and are better able to manage their money successfully.

Financial planning typically covers a broad spectrum relating to your current financial security and your future well-being (as well as the well-being of loved ones). It should include an analysis of your situation and needs and should recommend strategies for achieving your objectives.

Financial planning usually involves the following steps:

• Step 1. Define the specific financial objective(s) you want to achieve over the long term. For may of us, this means one or more of the following:
  
  - Building wealth
  - Reducing and controlling taxes
  - Increasing current income
  - Funding a college education
  - Preparing for retirement
  - Reducing estate taxes
  
  
• Step 2. Determine your current financial situation by answering these questions: What is my net worth after all my liabilities are subtracted from my assets? How much of that amount is readily available in case of an emergency? How much discretionary income do I have after fixed expenses are paid? How much money can I comfortably afford to save and/or invest?
  
  
• Step 3. Map out an investment strategy for reaching your objectives. This includes figuring out how much money you will need to achieve your objectives and setting a timetable. How much time do I have to accumulate the money needed to meet future financial obligations?

Susan Posey is an Investment Consultant with IJL Wachovia in Columbus, Georgia.  IJL Wachovia, a division of Wachovia Securities, Inc., is one of the nation's largest regional full service brokerage firms, offering a full range of investment services to investors.