~ Chapter Two: The Beach and the Map ~

The beach is a metaphor for your life representing the people you will meet, your life experiences and your financial undertakings. As time progresses, your life changes, your family grows, your relationships change and there are usually more people to include in your plan.

The sand on the beach represents your money. Over the course of your life, with the help of the shovels (your advi sors) you fill the various buckets with sand and eventually the shovels will help you move sand from one bucket to another when it is appropriate to do so.

As we explained earlier, on a regular basis, the beach is very consistent but gradually changes over a long period of time. Often there are minor storms that come in and upset the beach a little, but Mother Nature quickly adapts and within a short period of time the beach returns to normal. Every once in a while, there is a major storm and the beach is changed forever. The map will help protect you from the minor storms and provide you with a plan of ac tion in the event of a major storm.

We have all thought about finding that special treasure map that would lead us to a “pot of gold” that would solve all of our financial concerns. Other than winning a large lottery or hitting a major home run with an investment, the “pot of gold” is seldom found. However, I believe that with the right map and the right shovels filling your buckets, achieving financial security is possible for anyone. Even if you do win the lottery, you will still need shovels and buckets to manage your winnings.

The map has seven parts to it:

“Who’s who”

This represents all of the people that you will encounter in your life that will either help you with the plan, or for whom you will have some responsibility towards, that will be included in the plan . “Who’s who” This represents all of the people that you will encounter in your life that will either help you with the plan, or for whom you will have some responsibility towards, that will be included in the plan .

“How Much do I Have”

This represents the various assets in your buckets . These assets will change as time goes by and circumstances change, but it is always important to have a good idea of where you are with regards to your fi nancial picture on an annual basis. This is a fair market balance sheet update on an annual basis that recaps your fi nancial position consisting of assets and liabilities including contingent liabilities. This should not only show today’s values, but also projected values in the future .

“Look Out —Sink Hole”

This represents the multitude of dangers that one encounters during their lifetime . Unless you are constantly looking out for signs of danger and adequately protecting yourself with insurance and good advisors, things can get out of control quickly . With proper planning you will be prepared to handle most situations . “Look Out —Sink Hole” This represents the multitude of dangers that one encounters during their lifetime . Unless you are constantly looking out for signs of danger and adequately protecting yourself with insurance and good advisors, things can get out of control quickly . With proper planning you will be prepared to handle most situations .

“What’s the Flow”

This represents the fact that your plan is a living, breathing document and needs to be updated on an ongoing basis . Some parts are updated annually and other parts every fi ve years or more. For example, the detailed cash fl ow analysis will be updated on an annual basis, and shows your fi nancial sources and uses of cash, growth of assets, and the long-term eff ects of these changes on your fi nancial position. The key concept is to clearly understand where you are and where you are going . “What’s the Flow” This represents the fact that your plan is a living, breathing document and needs to be updated on an ongoing basis . Some parts are updated annually and other parts every fi ve years or more. For example, the detailed cash fl ow analysis will be updated on an annual basis, and shows your fi nancial sources and uses of cash, growth of assets, and the long-term effects of these changes on your financial position. The key concept is to clearly understand where you are and where you are going . “What’s the Flow” This represents the fact that your plan is a living, breathing document and needs to be updated on an ongoing basis . Some parts are updated annually and other parts every five years or more. For example, the detailed cash fl ow analysis will be updated on an annual basis, and shows your financial sources and uses of cash, growth of assets, and the long-term effects of these changes on your financial position. The key concept is to clearly understand where you are and where you are going .

“Family Documents”

This represents that your plan has many documents associated with it. Having this all organized in one place makes it easy to change and provide guidance to your family in the event of a major storm. This “file cabinet” contains all of your important documents, including estate documents (wills and trusts), insurance policies, debts of trusts, special instructions, escrow papers, tax returns and the like .

“In Case of Emergency, Break Glass”

This represents that you have to have a contingency plan made up of insurance or some savings to help you through a crisis in the event of a loss or a sudden change in financial circumstances. A good rule of thumb is to have liquid savings equal to 6 months of your paycheck and life insurance to protect your family . This is your contingency plan, written in plain English that is the road map in case of an emergency, sudden life change, death or disability . It should be reviewed and updated every few years . “In Case of Emergency, Break Glass” This represents that you have to have a contingency plan made up of insurance or some savings to help you through a crisis in the event of a loss or a sudden change in financial circumstances. A good rule of thumb is to have liquid savings equal to 6 months of your paycheck and life insurance to protect your family . This is your contingency plan, written in plain English that is the road map in case of an emergency, sudden life change, death or disability . It should be reviewed and updated every few years . “In Case of Emergency, Break Glass” This represents that you have to have a contingency plan made up of insurance or some savings to help you through a crisis in the event of a loss or a sudden change in financial circumstances. A good rule of thumb is to have liquid savings equal to 6 months of your paycheck and life insurance to protect your family . This is your contingency plan, written in plain English that is the road map in case of an emergency, sudden life change, death or disability . It should be reviewed and updated every few

“Pot of Well-Planned Gold”

This represents reaping the rewards of a lifetime of hard work and proper planning that enables you to have a well-funded retirement that you can enjoy .