A Life's Financial Plan

In the process of planing our financial future we should remember that investing is only one component of a larger personal financial plan. All of us need to keep our perspective and recognize that our long-term personal financial well-being depends on a number of important factors in addition to investments and investing.

For this reason, all of us should develop a sound, well-rounded financial plan. A good comprehensive financial plan is an important document in our lives. If done properly in the beginning and modified as needed over time it serves as a guide when making the major financial decisions of our lives. At its most basic, our financial plan becomes an easy-to-understand blueprint for our financial future. A good financial plan will generally detail three major categories: investments, estate planning, and insurance.

Investments

Investment planning may involve any or all of the following:

* Employer-provided 401(k)s
* 403(b)s, or pensions
* IRAs (tradtional or Roth)
* Self-employed retirement plans such as SEPs and Keoghs
* College savings
* Personal residences and other real estate investments
* Businesses
* Social Security
* Collectibles like, vehicles, art and coins

Estate Planning

Estate planning will include at least these basics:

* Wills or trusts
* Medical directives, including durable power of attorney for health care ( an individual who makes medical decisions for you if you can't) and a "living will" (a document that specifies your medical treatments if you can no longer make those decisions)
* Financial durable power of attorney (an individual to make your financial decisions for you if you become incapacitated)

Insurance

A well-planned insurance strategy will assure us of adequate protection now and into the future, and will give the coverage we needed without over-insuring or under-insuring. It may include:

* Health insurance
* Auto insurance
* Disability insurance
* Property insurance
* Life insurance
* General liability coverage (an umbrella policy).

A good fee-only financial planner should be consulted early in an adult's financial life to draw up a preliminary plan that can be modified as required in the future. A planner need not be consulted often, maybe only once or twice in a decade, but they should always be consulted when there is a major life change. Such events include marriage, children, death of heirs or beneficiaries, disability, and significant changes in our financial resources (for richer or for poorer).