Hi, I’m JJ Childers with this week’s edition of the Monday Morning Mentor. Our focus is on your finances. This week, we’re going to take a look at the fifth, and final, part of establishing a financial plan. This is the most important part because it deals with the formulation of the steps that you intend to take to get to your financial goal.
Over the past several weeks, we’ve gone over each of the first four parts of the financial plan and given examples. If you missed one of these parts, be sure to review the archives of past messages at the website provided in your email. Through these messages, we’ve operated on the assumption that we first set a financial goal, to attain a $1 million net worth. Next, we assessed our current situation to see how we look financially and determined a $150,000 net worth leaving us with $850,000 to go.
Next, we broke down our current income and asset resources and assumed an income of $80,000 per year and investable assets of $75,000. We then had to determine how much time we had allotted for attaining our goal. If we presume that we’ve got 20 years to go, that means that we’ve got to increase our net worth by an average of $42,500 per year to make this happen. Notice that I said “average.” It’s much more likely that we’ll start with less and build greater amounts once our resources increase.
The fifth step in the process is to formulate the steps that you intend to take to reach your goal. This will be different for different people. The key, however, is to remember that I said steps (plural). We’re not looking for a single way to try to create $850,000 with one great deal. While it’s possible, it’s not probably. More specifically, it’s not nearly as probable as formulating a plan and then following it.
I mentioned in an earlier message that these are the five parts to formulating a plan. I also mentioned that each one of these parts had a number of aspects to it. This fifth part is the key to everything and as such, has more parts associated with it than any other. Over the next several weeks, we’ll take a look at a plan that anyone can follow to create the wealth that they seek for themselves. Stay tuned so that you can do it too.
