My personal planning process
After my post yesterday, I had a bunch of people reach out to ask about how I go about my personal planning.
It has taken me 15 years of trial and error to make this simple enough to fit on a single page.
There are four parts to a great wealth plan;
1. Foundation - do you have the essentials in place
2. Wealth buckets - how do you segment wealth for each life stage
3. Financial independence - how much do you need and for how long
4. Legacy - what impact do you want to have in the world
Foundations are often the most overlooked. We must segment this into Plan A and Plan B
A good Plan A includes a clear plan for all of your goals, a deep understanding of your money mindset, clarity around your cash flow and a road map to balance lifestyle now and later.
Plan B is all about protecting against the unforeseen. We need a war chest for risks we can self-insure for, insurance for risks we want to outsource, structure to optimise tax and protect assets and estate planning to ensure our wealth goes to the right places if we die or become incapacitated.
We break this down into two numbers - $ surplus that needs to be allocated to the buckets and a % of peace of mind we have against the worst happening.
This work allows us complete clarity around our wealth buckets and we can work out exactly how much is required for short, medium and long term. Investments are no longer guess work, they are pass or fail based on the criteria we need them to fulfil to maximise the likelihood of achieving our goals.
Each bucket has a dollar target broken down into money milestones (will cover this in another post).
Financial Independence is really simple. We need to know how much passive income we need and for how long we need it.
This gives us a financial freedom figure - a net wealth target required to provide us with a clear target we need to have a choice over how we spend our time.
Some of our clients are happy to erode their wealth as they don't want to leave a big inheritance behind. Others want enough wealth that they can live on the income it produces. Some want their wealth to grow in perpetuity.
Whatever the goal, we can define the wealth target required.
Lastly, we work out our legacy plan. We need to define what we want to do with our excess wealth, how do we transfer it tax effectively and ensure the beneficiaries of that wealth have the right tools and frameworks to manage the money.
This is where The Family Vault comes into play.
Imagine having a one-page plan that gives you this much clarity. Most people think they are effective planners until they implement our systems and finally realise they were walking in the dark financially.
If you're looking to level up your money game this year I have 15 spots left for our new money membership where you can get started working with us for $100.
Drop the word 'plan' below and I'll send you the details