Does this Wealth Program Really Work?

by Fern Alix LaRocca CFP® EA · 0 comments

I received this reader question recently and wanted to respond publicly:

“I would like to no more about this programs and does it really works? I have made a few investments on the stock exchange through information that i got from Penny Stocks newsletters but was unsuccessful. I want  more wealth but dont no how to start or what to begin with.”

This program is not something I made up or just discovered on my own. It is a well researched and verified process that Certified Financial Planner Licensees use if they practice comprehensive financial planning (which many do not). I have used it personally and in my financial planning practice and found that it works ALL the time if followed correctly. The problem is that many of you will not follow it. Why? Because it isn’t fast, it isn’t sexy, there are NO get rich quick schemes and NO, your life is going to change forever moments.  What it does is give you a road map to arrange your finances to support your current lifestyle and your projected lifestyle (and that means different things to different people). It means taking into consideration how you live, play, what your risk tolerance is, what your tax bracket is and a host of other details.

Where do you start? You start with a strong money foundation and that is following Step 1. to Step 3.

Step 1. Cash and Credit. Cash flow and credit is the life blood of your financial plan. Understanding how much you take in and how much you spend shouldn’t be a painful exercise but a motivator to work with what you got in the best way possible.

Step 2. Risk Management. Everything you acquire can be taken away in one full sweep (and I know you have seen it happen) without the proper insurance.  Getting the right insurance that fits your needs and your budget is a strong step in preserving what you are building on.

Step 3. Estate Planning. You are not building wealth just for you but for your family. A few easy legal documents can insure that they get what you have worked so hard to build and get it easily and without taxation. I have seen so much grief and family burden due to lack of a few simple estate planning documents.

Step 4 is Identify Goals. There is a saying that if you reach for nothing, that is what you will get. What does the future hold for you? Do you see yourself working part-time at age 50? Or would you like to not work at all at age 60? Or maybe you want to change careers or open up a small business? Maybe you would like to send your kids to a private college? Maybe you want to go back to school to learn a new trade? Perhaps you just want to get out of debt and start an investment plan? Whatever you want, that will cost money and you can figure out how to afford those things by goal setting. Unfortunately, it isn’t going to just happen one day. You are going to make it happen by planning for it. Now that you have a solid wealth foundation, you can begin to invest.

Step 5 Investment Planning.  There is nothing complex here.  You pick out (a process called asset allocation)  no-load mutual funds with a variety of asset classes and asset styles based on the return you want, the risk you are willing to take, and the taxes you are willing to pay. Once you have your allocation, it is set it and forget it time. Sorry, I just haven’t seen the research that market timing (darting in and out of investments) works but asset allocation does. You revisit this asset allocation once a year.

Step 6 Retirement Planning. Retirement planning is all about using  these wonderful tax deferred retirement plans (401K,403b,457,etc.) to help us build wealth to meet our goals. Let’s face reality folks. Even if you loved your job and will work everyday until you drop, there will be days,  months, or years during your lifetime that you cannot work. Then you should have your investments replace your earned income.

Step 7 Tax Planning.  I am all for getting the most bang for your buck and tax planning provides that in your wealth building program. For every dollar that you invest, if you can get ten cents to fifty cents back from the government, well why not do that?  That is why so many deferred compensation plans, IRAs, SEPS , etc.  are so popular. They provide a lot of bang for the buck. Don’t get greedy by wanting tax free everything but do take tax implications into every investment decision you do. The difference between 5% taxable and 5% tax free is huge if you are in a high tax bracket.

Those are the 7 steps to build wealth and I go into detail for each one. I have also given you  resources that I value to help you even more. There are links to get a free credit report, and links to fee-only Financial Advisors, and links to financial calculators.  If you aren’t the do-it-yourself type, I am always available to help mentor you through the steps. What is different about me, Wealth Coach Fern, is that I empower you with the information and the tools to build your own wealth program.

Why is that so important? Because studies have shown that most of you will follow through on a comprehensive financial plan if you “own” it. That is what attracted me so much to the coaching model. I want you to be successful and I can coach you through a complete personal financial plan. I have 30 years (gulp! I am old) experience in this field and very passionate about it. If there is any way I can make it easy or if you need more info on a topic, let me know. I want you to build wealth and wealth beyond money!

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