insights
10 Debunked Myths of
Financial Planning By Amanda L. Williams
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avigating the white noise of financial planning can be challenging. We’ve taken some time to debunk some of the most common myths you’ll come across. Creating and managing a financial plan efficiently is easily one of the most impactful things someone can implement into their lives. Money is a staple in today’s society and access to information is unlimited, which can make it even more difficult to weed through what is true and false. We hope that you will gain some clarity after reading through the following misconceptions. With that being said, let’s jump right in … Myth #1: I Don’t Need to Have a Plan Until… or I Don’t Need a Plan Because Too Much Changes Anyway Truth: Procrastination is the action of delaying or postponing something. We too often procrastinate on some of life’s more important planning. We’ve witnessed firsthand the negative impact waiting to plan or even worse, failing to plan, can have on a family or business. It is so crucial to plan for the many “what ifs” in life as well as the unavoidable such as death. Planning is not always fun or instantly gratifying; it takes work. It may be easier to continue to avoid reality and the “what ifs” of tomorrow, however. “Why are you waiting? Tomorrow isn’t guaranteed.” -Anonymous A plan in fact simplifies your life by keeping you, your family, and your financial goals on track. It establishes clear and actionable steps to keep you moving from Point A to Point B, ultimately helping you reach your destination. Just as you may need to take a detour on a trip, you adjust your plan as your family and financial circumstances change over time. Myth #2: Financial Planning is Really Just About Investment Management Truth: As times have changed, the word investing has become interchangeable with financial planning in many people’s minds. When you discuss investment management, it is important to address your asset allocation and rebalancing your portfolio, however, that is not all. Taking charge of your investments is only one piece of the puzzle. Experiencing a true financial planning process will help you navigate and coordinate an overall strategy that will incorporate all aspects of your world. Your financial road map should address your income, assets, liabilities, cash flow and how you protect what you own. It will coordinate all the pieces to make sure you’re on track towards your financial goals.
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Financial Insights • 2022
Myth #3: I Don’t Need a Formal Financial Plan If I Always Make Good Financial Decisions Truth: Have you heard “Hindsight is 20-20?” Yes, we have too. If we all knew the right financial decisions to make and when to make them then no one would need a financial plan. The truth of the matter is that’s not possible. We all strive to make good financial decisions but without a well-thought-out plan, it’s almost impossible to make the headway necessary to meet our goals. Financial planning requires coordination of retirement planning, investment management, cash flow evaluation, tax strategies, estate planning and asset and income protection. Many people think that buying a product will be a “magic fix” for their money problems and provide for their loved ones. In actuality, financial planning is complex and requires planning, not just making decisions on a wing and a prayer. Myth #4: Financial Planning is the Same as Retirement Planning Truth: Creating a financial road map does indeed help you save for retirement; however, retirement is a goal within a plan. We’ve heard repeatedly that folks are “all set” because they’re saving, even maxing out, their retirement plans. Financial planning is so much more. What happens if you
