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Get Your Life ‘In Financial Planning’ (Step 2)

Let’s focus on step 2, Gathering Data!

The financial planning process can seem a little SCARY, especially when you start gathering data. When you start to look at all the data needed and pulling and collecting documentation, it may seem a little overwhelming. Stop, take a deep breath, and move forward.

This step is where the information required to make recommendations for the appropriate strategies and financial products to reach your goals is gathered. To focus your thinking and narrow the types of products and tools right for you, think about the following questions:

• What is your time horizon?

• Do you want to accomplish this goal in five years, 10 years, 20 years, or 30 years?

• What is your risk tolerance?

• Are you willing to accept a high relative market risk to achieve your investment goals, or will a conservative portfolio be a better option for you?

• What is your starting point or how far along are you in your goals?

• Do you have any money saved yet?

The data gathering step is all about YOU! It is about where you are, what you have, what you want to do, and what you are willing to do to get there. In the end, your gathered data should include:

• Income and expenditures

• Assets and liabilities

• Risk attitude, tolerance and capacity

You may already know this information; however, it is better to have it all written down so that you can visualize all the necessary data required to make investment decisions. It is also important to have documentation to back up your responses. In fact, you should think of this step as your opportunity to get organized.

There are a lot of worksheets online that can be used to help you gather and organize your data. Alexander Financial Planning, Inc. has a good worksheet that is every detailed and will lead you in the right direction for completing this step. So that’s your homework! Get Organized and Get Your Financial Life!

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