COMPREHENSIVE FINANCIAL PLANNING

So many financial services companies are getting into the financial planning space and
consumers are left scratching their heads wondering, “Which financial advisor is right for
me?” This confusion is compounded when the term “Comprehensive Financial Planning” is
used loosely by so many financial service providers who are not practicing truly
comprehensive financial planning.
Comprehensive Financial Planning is more than the active management of investments. It is
more than the creation of a retirement plan and it goes well beyond regular check-ups of a
portfolio. Truly Comprehensive Financial Planning is the act of planning for, and prudently
addressing life events. It addresses everything from running a business, to planning for a
child’s education, preparing for eventual retirement or creating a plan for your estate. It
should also addresses potential events that can drastically alter your long-term financial
security. This is true Comprehensive Financial Planning.

So, you need to ask yourself, “Is my financial advisor truly comprehensive?” This sounds
easy enough, but very few consumers know the questions to ask to make this determination.
That is why FMN bases our services on the Certified Financial Planner's definition of the
financial planning process.  It consists of the following steps:

COMPLETE FINANCIAL PLANNING & INVESTMENT

MANAGEMENT

We provide financial planning and investment management services to help ensure our
clients are making the most of their resources and to protect them from uncertainty. We take
each of our clients through a unique five-step process called 360 Wealth Management.
DISCOVERY

Through questionnaires, meetings, and discussions, we will gather your financial information
such as:

 Income and expenses

 Investment account statements
 401(k) statements
 Life and disability insurance policies

 Auto and homeowner’s insurance policies

 Estate plan documents
 And much more
With this information, we can begin to develop a comprehensive overview of where you are
currently. We don’t stop at where you are today though. We then help you determine what
you are passionate about and the kind of lifestyle you desire. With this information, we will
help you develop a vision statement for your life that will identify the purpose of money to
you and guide our recommendations and strategies throughout our relationship.
 
ALIGN RESOURCES

Armed with all of your financial documents and goals, we then enter this information in a
sophisticated financial planning program where we can generate cash-flow reports, net-worth
statements, Monte Carlo simulations, financial graphs and charts. The most important and
critical part of this process is our ability to run different “what if” scenarios. For example,
through this financial modeling process, we can answer such questions as:

 If we help pay for our children’s graduate school tuition, how will that affect our own
retirement?
 Should we invest our 401(k) more aggressively than our other assets?
 Does it make more sense to invest in a Roth 401(k) or a traditional 401(k)?
 If we make annual gifts to our children and grandchildren, how will that reduce our
assets and affect the estate tax we will owe?
 What would happen to our finances if one of us suffered a prolonged long-term care
event?
 Should I continue to pay for this life insurance policy or is there a better use for these
assets?

OPTIMIZED INVESTING

Once we have analyzed your current financial situation, know your specific goals, and have
run through the various “what if” scenarios discussed above, we can create a strategy for
investing your assets. Not just any cookie-cutter strategy, but one that is designed and
optimized just for you.

We view each client’s asset allocation and the managers that comprise it as a dynamic
process. We will vigorously monitor your investments, suggest new strategies when
appropriate, and provide quarterly consolidated performance reporting. In addition to
investment consulting, we will work closely with your other professionals to make sure your
wealth management plan is being implemented and optimized according to plan.

SURVIVING DISASTERS

Bad things happen to good people all the time. Some things we just can’t prevent, but the
purpose of this step is to make sure that if disaster strikes in your life, you have done what
you can to protect yourself.

But what are the disasters we are protecting? Everything from premature death, disability, an
auto accident, a long-term care event, a fire, and much more. This is a critical step in the 360
Wealth Management process, because the best investment plan in the world can become
irrelevant in seconds unless you’ve protected yourself from disasters.

Through our analysis and through experts we utilize, we will make sure you are adequately
insured in these areas:

 Life
 Disability
 Homeowner’s
  Auto
 Long-Term Care
 Health

If you are underinsured in one or more of these areas, we will help you determine how much
you need and where to get it. We will even help you get quotes and help you select the policy
and company that is right for you.
 
PROTECTING YOUR INTERESTS

The 360 Wealth Management process wouldn’t be complete without making sure that
everything you’ve worked so hard to achieve is protected. We will analyze these factors and
make sure we have protected you.

 LAWSUITS – We live in a country where you can be sued by anyone, for anything,
at anytime. There are easy steps you can take to protect yourself from lawsuits. There
are also more advanced strategies that may be appropriate.
 ESTATE PLANNING – Uncle Sam may take nearly 50% of your estate when you
pass away. There are many things you can do to keep more of what you’ve worked
your whole life to achieve.
 INCOME TAX PLANNING– For most individuals, taxes represent their single
largest expense. When it comes to our investment strategies, we don’t just focus on a
high return, but a higher after-tax return. It’s not what you make, it what you take
home. We tax loss harvest throughout the year and work closely with our clients’
CPAs to ensure they have the necessary information to reduce your taxes.
 IDENTITY THEFT– In addition to protecting your financial assets, we also need to
protect your identity. Identity theft is listed as one of the FBI’s fastest growing crimes.
Millions of people are victimized each year. It can take hundreds of hours and
thousands of dollars to recover. We will help you protect yourself by taking several
precautionary steps.
 SECURITY – Our most precious interest is our family and ourselves. For certain
clients, we work with security and privacy consultants to make sure their homes are
physically secure and systems are established. For our clients who travel oversees
extensively, we will also recommend kidnap and ransom insurance and preventative
training. Our objective is not to scare you, it is simply to make you aware of the risks
and take a few steps to ensure your safety. Not all clients will want or need to take all
of these steps, but for those who do, we can work with you and experts in these fields
to help ensure you are well protected.

Goals

It takes a holistic view of your lifestyle, your needs and your priorities. A financial plan is a
tool to analyze your financial situation and provide projections that can assist you in
understanding your true situation and whether you can achieve your goals.

 Financial management 
 Investment planning 
 Insurance and risk management 
 Tax planning 
  Retirement planning 
 Business planning 
 Estate planning and legal considerations

Smart goals

What Are SMART Goals?

The concept originated from Peter Drucker’s “management by objectives” process and later
George Doran coined the SMART acronym in reference to goals set by management.
Although the idea stems from the business management field, it can be used to create
actionable goals for personal or professional applications. There are a few variations of the
meaning of the acronym, but we will discuss the most appropriate version for creating
personal finance goals.

We recently wrote about Why Dave Ramsey’s Baby Steps Might Not Work For You and we
wanted to elaborate on an effective method you can use to set your financial goals. We think
that financial goals should be personal and this means taking some time to think about what
you want to achieve.

Specific

The first aspect of a SMART goal should define “what,” “who” and “which.” Basically make
it as detailed as you can. A regular goal may be, “We will pay off our debt.” But this part of
the goal would go into detail, “My husband and I will pay off our credit card debt.”

Measurable
The best part of setting goals is being able to measure them. Quantify exactly what you’re
triving to do. This means asking “how much money?” This step may require some research
(and a little math) if your goal is to save for a mortgage down payment or save to buy a car in
cash. For help with this, check out our article How To Make A Savings Plan For A Big
Purchase.
On the other had, you may just have to look up your credit card balance or your goal may be
more arbitrary, like saving $500 each month to afford a purchase.

Achievable

Remember you’re setting goals with the intention of reaching them. Don’t set a goal
that is so out of reach it’s unlikely you can achieve it. As George Doran wrote, “state
what results can realistically be achieved, given available resources.”

If you are saving a couple hundred dollars each month, don’t start with a goal of
saving $5,000 a month. Think about realistic goals that you can attain with your
current resources.

For this part, state how it is achievable. So for our goal of paying off credit card debt,
we would say “We will pay $350 each month toward our credit card balance.”
Learn about different types of bank accounts to find the right one for your lifestyle to help
you reach your financial goals.

Relevant

How does this fit in with your other financial goals? If this goal is for you and a
spouse, are you both supportive of the goal? Each goal you create should fit like a
puzzle piece in the big picture of your financial goals. This means you should think
about the purpose of each goal in relation to others.

If you have a few forms of debt, then the goal of paying off your credit card relates to
the big goal of being debt free. For instance we might say, “This will get us closer to
our larger goal of being debt free.”

Time-limited

SMART goals need to have a time frame. Whether it is long-term or short-term, you
need to specify “how much time?” How many months or years will this take? Keep in
mind that you need to be realistic, but this is a time frame that should remain
unchanged. This means that you need to set a specific point in time for you to
measure if you achieved your goal.

If you want to say, “We will do this in 4 years,” that’s fine, but you need to actually
say when 4 years is. So if it’s Jan 1, 2020, you would say “We will do this by Jan 1,
2024.”

When you’re thinking about your goals, remember to think both short and long-term and set
goals for both periods.

Break Down Goals

It is helpful to break big goals down into smaller, more digestible ones. In fact, if your
big goal is to be debt-free then keep that in mind but don’t make that SMART goal
until you have made, but not yet achieved, all of your smaller goals.

SMART Goals Examples

For example, here are 2 examples of the SMART goals that are pieces of the bigger
debt-free goal:

1. Credit Cards
S – “My husband and I will pay off our credit card debt.” 

M – “We will pay off our $3,748 credit card balance.”

A – “We will pay $350 each month toward our credit card balance.” 

R – “This will get us closer to our larger goal of being debt free.”

T – “We will do this in 4 years by Jan 1, 2024.”

2. Car Loan

S – “My husband and I will pay off our auto loan.” 

M – “We will pay off our $2,590 auto loan.”

A – “We will pay $250 each month toward our auto loan balance.” 

R – “This will get us closer to our larger goal of being debt free.”

T – “We will do this in 3 years by Jan 1, 2023.”

If you have goals that relate to paying off multiple forms of debt, keep in mind that
the order in which you pay off your debt is important if you have different interest
rates. For some guidance on this, read our article Paying Off Debt: Snowball vs
Avalanche Methods.

Write Your SMART Goals Down

It’s easy enough to think about setting SMART goals, but it shouldn’t just be a goal
you keep in your head. Save it on your phone, write it in a notebook, put it on sticky
notes all across your house. Whatever works for you, do it!

Fit SMART Goals Into Your Budget

A helpful way to make room in your budget for your financial goals is to use a zero-
based budget. This budgeting method gives every dollar of your income a purpose,
including savings and paying off debt. Check out our article to learn more, Make A
Zero-Based Budget & Save 18% More Money.

It can be hard to achieve goals, but we think that it shouldn’t be hard to set goals. Try
taking the time to set SMART goals and check in with yourself along the way to
measure your progress.

Our Take

As a couple, we’ve been talking a lot lately about financial goals and the best ways
to go about reaching them. One thing we think is really helpful is accountability. So
share your goals with your friends and family. Talk to them about your goals and how
they can support you. It can make all the difference to have a support system rather
than going about it alone.

As we’ve mentioned before, one of our goals is to buy land in another state. We’re
not exactly sure where we want to buy, so we are estimating how much money we
need to save – for now. So we’ll call it $20,000 that we need to save in total to buy
the land and cover closing costs. Over the course of 10 years that means we would
need to save $167 a month, so we’ll round up to $170.

Here is our SMART goal:

S – We (Rebecca & Tiago) will save enough money to buy land in another state.

M – We will save $20,000 to purchase a plot of land.

A – We will save $170 each month to put toward our land savings.

R – This will get us closer to our larger goal of building our own home near
mountains.

T – We will do this in 10 years by July 10, 2030.

We will add this savings amount to our monthly budget and be sure to keep it
separate from our other savings. For us, it’s helpful to have a large goal that we’re
working toward as well as smaller, more attainable goals.