Planning for a Bright Financial Future

Posted: 1/23/2015

Financial planning brings the future into the present

Where do you see yourself five years from now? How about 10 or 20? Do you picture yourself owning a home, rental property, starting a business, funding children’s education, retiring early, leaving a legacy? Each of these financial goals and many others can be monetized (quantified into dollars) and achieved through “financial planning.” “Financial Planning brings the future into the present, so you can do something about it today,” says Christopher Otto, Certified Financial Planner (CFP®) and Financial Planning Manager at Bankoh Advisors.

Common mistakes

One of the most common financial mistakes people make is committing to an investment strategy or vehicle before clarifying their goals. Another is not working with someone who quantifies or translates those goals into real dollars and actionable steps. Only when they have found someone who will assist with clarifying their goals and translating those goals into actionable steps should they invest in, or deploy, a particular vehicle or strategy for achieving their goals. Too often people rush to make an investment in a financial product, only to find later that it probably wasn’t the optimal solution they could have used for meeting their goals. “Every investment or strategy should have a purpose related to your goals—then it’s a solution,” says Otto.

Financial Planning is multidisciplined, requiring expertise in analyzing income, assets, liabilities, insurance, investments, tax exposure, and estate planning. It also involves the process of goal setting, strategy review, solution implementation, and monitoring. The key is not whether an investment vehicle or strategy is good or bad, it’s determining whether it’s the most appropriate solution for your particular set of circumstances, needs, and goals.

Work with advisors who take a holistic view

Otto explains, “A Financial Planner often coordinates activities of a team of professionals with expertise in various financial areas, objectively presenting the team’s recommendations, and helping you weigh alternatives so you understand each strategy’s implications.” Be sure to work with professional advisors who take a holistic view of your financial life to help you navigate through the whole world of personal finance and keep you focused and on course to meeting your goals.

Review your plan annually

Finally, review your plan at least annually or whenever you experience a major life event, such as with a marriage, new child, divorce, job loss or if there are significant changes in portfolio values and external economic and tax law changes.

ABC'S OF THE FINANCIAL PLANNING PROCESS

Establish and prioritize goals
Consider strategies that can achieve competing goals
Implement solutions
Monitor your plan & make needed course corrections

Bankoh Advisors is the trade name used by the registered investment advisor Bankoh Investment Services, Inc., a nonbank subsidiary of Bank of Hawaii and a member of FINRA/SIPC. Securities and other products are NOT FDIC INSURED, NOT BANK GUARANTEED, AND MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL INVESTED.