The one thing you need to know that without financial planning, your money goals just won't happen.  Months go by, even years go by so very quickly.  And if you aren't saving money each and every month, you will find yourself at 65 years old living on social security and not having an extra penny to spend.  And what kind of life will that be?  Not too great!

But you also must know that even with a plan things may not turn out exactly the way you want. You must have contingencies and even better be able to adapt to changing circumstances. For example, the 1990's provided fantastic returns on stock market investments. A friend of mine participated in these markets and did well. Well enough to retire on his own terms in his mid 50's. Then an unexpected, almost violent downturn in the stock market forced him to re-think his game plan. He still plans on retiring early, however he will most likely have to find some part time work in something he is passionate about. This happens to be golfing, so a part time position at the local golf course will provide that supplemental income and access to his favorite pastime.

One of the ways to plan your financial life is to first create a budget. A budget will show you how much you can spend and how much you can invest. Knowing these variables, you can rest easy, with some assurance your finances will not get in the way of your life plan. Once you have a budget we will have you develop a systematic investing plan that will give you some peace of mind. There is a certain minimal level of financial success one needs to be happy and free. This level of success will vary from person to person. The happiness and freedom one achieves from the minimal level of financial security is that peace of mind. The younger you are the easier it is to achieve this financial freedom. The older individual needs a more disciplined approach if he or she is not already there.

Do you have credit card debt?

If you are paying off credit cards and still trying to save, you are defeating the purpose.  You must pay off all of your credit card debt before a savings account will do you any good.  Most credit cards finance fees are between 9% - 21%.  If you are accumulating those fees each month, the money you put into savings is going nowhere.  You must pay off these cards first, with ALL your savings.  Yes that is scary, but the only way to accumulate money is to have no credit card debt. Your credit cards can ruin you if you let them.  I suggest only one credit card to use in emergencies, or if you will honestly pay it off each month.

Beyond this minimal level of financial success we find many other levels that can be achieved. It is up to you. Do you wish to become a millionaire? How about multi-millionaire? These more ambitious levels of wealth require more than just having a job. Even a well paying job. Some very highly paid individuals are actually just keeping even as their expenses escalate with their income. The way to achieve super-wealth most often requires the creation of a business or even several businesses. The best resource I have found on this is in the book "Cash Flow Quadrant" by "Rich Dad Poor Dad" author Richard Kyosaki. It is a complicated subject and requires time and research to accomplish.

The lesson I will give here will be to provide the minimal standard for happiness and freedom. The basis for this financial success revolves around systematic investing. We will discuss lump sum investing later. Most anyone can live below his or her income level. It is a matter of setting your priorities.

Do you need a financial advisor to help you with your investing?   There are many sources available for this if you think you need it. Look at our resources list.

It is important that you have the basic knowledge and understanding of finances to invest on your own. Having some sort of knowledge helps you to make wise decision making, even if you do hire a financial planner.

Here is a little bit of information that might help you as you begin to look at the area of financial planning. The whole concept is to put your money where it will work hard for you. Risk needs to be minimized but not entirely eliminated. If we look at the long term we will find that small cap stocks have historically (grown, returned or yielded) the most. Whereas, T-Bills and Bank Savings accounts have grown the least. These investments should not even be called investments as they have historically lost after taxes and inflation. That is exactly why we need to take some risk. (It is far riskier&to guarantee a loss in "safe" investments than it is to take "appropriate" risks, which should give us potential profits. So if we were to take the highest risk, highest potential profit route, we would invest all our money in small cap and even micro cap stocks. (A micro cap stock is like a successful small business). These historic returns may not always be in place although I think there is still a good chance for that history to repeat. The one caveat to this historic rate of return is when we examine short periods of time. In short periods, various other asset classifications have faired better. (i.e.. bonds, blue chip stocks and foreign stocks).  That is one reason why I recommend an asset allocation strategy.

Asset allocation is how one divides ones money up between these asset classes. There have been several scientific studies on this matter and they have found that there are ideal asset allocations. There are certain factors such as age and tolerance to risk that can effect your ideal allocation. In a nutshell the optimum strategy is to take what you can save and periodically place this money into your ideal asset allocation. Your mutual fund investments would be divided between personal savings and retirement savings. If this all seems to overwhelm you, there are many books on the subject, and also we can direct you in the area of choosing an appropriate financial planner for you.