Game plan for winning at finances

It is not just about winning one game,you need to target the world cup which means actualising your financial dreams into reality.

The current World Cup has thrown up few surprises; by and large,the better teams have fared as expected,while the minnows except Ireland failed to make a mark. Is it because the Irish,Dutch or Canadian teams arent talented enough? Not true. The best teams win not because they are more talented,but because they are technically and strategically superior. They have great leaders and coaches,work harder than anyone else and are better at establishing realistic goals,developing game plans and selecting the best team for the job. In fact,its not all that different from financial planning.

While we work hard at our jobs,we dont spend as much time contemplating our money and whether it is serving us well. By taking out time to understand your financial status,you can create a blueprint that will enable you to successfully achieve your goals,whatever they may be a house,a car,a wedding or simply complete financial security by a certain age. The next and most critical step is the selection of the right tools asset classes that create a balance in your portfolio and lead to the eventual achievement of these objectives.

Lets look at each of these steps in turn.

Determining Goals

Though we each have our respective favourites in the current World Cup,there is no denying that the Australian team remains favourites,simply because of their performance in the last three World Cups. By playing to their strengths as well as their opponents weaknesses,they were able to march from the initial rounds to the final one. Losses did not deter their progress or upset their plans; they used these setbacks to improve themselves and adapt top various uncertainties that a match can throw up,leading to arguably the best winning streak for any team in world cups.

The same should be applicable to life. When determining our financial goals,one must ask oneself the following questions

What do I aspire to be in life?

What are my dreams? Are they common for my family?

What are my assets,incomes and expenses?

What are the choices in my life Aspirational amp; Financial?

Once the planner has this information,he is in a better position to understand where the client stands. As in sports,there are certain musts and haves that determine whether ones goals are realistic or not. With the kind of firepower Australia had during the 1990s in the form of the Waugh brothers,Shane Warne,Michael Bevan,Glenn McGrath and such superb talents,any goals they set were in accordance with what they could realistically achieve which was a lot,and their coaches including John Buchanan knew it.

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Similarly in financial planning you first need to first know whether your goals are realistic,and also whether the financial tools that you have at your disposal can help you achieve them.

Create a game plan

The next step in the process is to have a solid blueprint for victory. With the aid of the information gleaned from the first step,you can determine the best way to achieve your goals with the available resources.

When you are making a game plan,remember that adaptability is as important as the strategy before the game. Once you are in the game,its important that you manage your options wisely to give you the best results. We may see several instances during this world cup when captains opt to open their bowling with a spinner to make it more difficult for the opposition.

Similarly when it comes to financial planning,the game plan needs to adapt to changes in the market conditions and aspiration/desires to give you the best result.

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If you are taking assistance from a financial planner,who will take over the job of sketching the plan by virtue of being the financial coach,you must discuss,debate even argue with the planner. Thus,the financial planner succeeds in better understanding the way you think and is able to tweak the plan here and there to get one that is best suited to achieve the marked family goals.

Get the best combination

When Indian coach Gary Kirsten sat down with captain M S Dhoni and the selectors before the World Cup,they had an important task ahead of them: deciding on the ideal combination of players that could bring the Cup back to India. It is obvious that you need the most talented and successful athletes representing the country out there. However,you also need players whose style and temperament are suited to the playing conditions,who can handle pressure,are flexible and can play multiple roles and who come together as a unit without creating internal friction.

This can be compared to your choice of asset classes and allocation i.e. equity,debt,real estate or gold. Each has its own characteristics,track record and unique place in a portfolio.

With the right combination,they create a strong,balanced financial foundation for the client. They cancel out each others weaknesses and magnify their strength. Once you have chosen the asset classes then decide the right players.

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Keeping these principles in mind,you can easily keep financial problems at bay. Whether you plan your finances yourself or work with a financial planner,remember that its not just about winning the game. With the right analysis,prudent thinking and some sacrifices,you can create a portfolio that is most likely to lead you to victory over indecision and confusion caused by poor financial planning. Like I said,it is not just about winning one game,you need to target the world cup which means actualising your dreams into reality.

Author is,Founder amp; CEO,Freedom Financial Planners