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4 Pillars of Your Complete Financial House Overview

There is so much information that can be shared about the Four Pillars of Your Complete Financial House, that we simply cannot cover it all in a single post. So, this will give an overview to help you understand what is needed to create a Complete Financial House. To get started, we first must talk about retirement, and then we will touch on exactly what those four pillars are.

It may be no surprise that the concept of retirement has changed a lot in recent years. Traditionally, it was about retiring at age 65, buying a few things, then enjoying the remaining years of your life. Now people have a chance to live 30 to 35 years into retirement! People can choose an early retirement, pursue a different career, start working part-time, and much more depending on their goals and desires. The Four Pillars of Your Complete Financial House will help in achieving many of your financial goals, including creating a plan for the next phase of your life.

Let’s jump into an overview of the Four Pillars of Your Complete Financial House:

1. Mindset

The first pillar, your mindset, is where everything starts. People usually start with their assets and investments when starting to discuss retirement planning. However, you should first establish your mindset, determine what is important you, and what you want to accomplish. How do you do this?

Have a vision in mind. Paint a picture of what you want to be doing in the next five years, ten years, and beyond. What will be important during this time?  Think of it like a golf player visualizing his shot before he takes it, or an actor visualizing his scene before acting it out. The visualization process will be very helpful.  

Then think about your purpose.  What financial dreams and goals will be your priority during these years? Set a time frame, write your goals down, and stay on course. In my experience, those who visualize, write goals down, and have discipline to stay on track are more likely to achieve their goals.

2. Strategy

Now that we have clear goals, we can create the blueprint needed to make your Complete Financial House. We need a plan to help you get from where you are now, to making it happen and living your life as intended. It’s like building a house; you don’t just build it room by room. You should think about it like a blueprint, and make every part of the plan work together to achieve the vision.  

3. Tactics

After building a plan, we start working out the details. The most crucial part of all is knowing what your expenses will be. When you know how much you spend, you can then determine how much you’re able to save. Savings will lead you to an understanding of how much money you can accumulate.

Spending can be separated into three categories: Needs (or survival), Lifestyle, and Legacy. Lifestyle and legacy expenses are flexible and the point of categorizing them is to see how you can spend money efficiently.

The decisions you make financially will also affect other plans in your life. Then you can start delving into deeper tactics such as planning tax efficiency, social security strategies, spousal decisions, and many more. You can also look at cash management, money protection, and investment allocation.

4. Ongoing Accountability

Of course, the plan may be tweaked and changed as new desires and life changes occur. You may decide to live in another location during retirement, or decide to spend more money on travel instead of golfing every day. Either way, there should be continuous tracking to make sure that everything is on course despite any changes to the plan.  Continue to look at the plan since a change in one part of the house may change the complete financial house.

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The four pillars are just the beginning. It will take some time to build an overall game plan, and couples, for example, may have different visions which can take time to build and unify. When planning with financial advisors, remember to give them all information as every detail will count towards making a complete plan.

In future posts, we’ll go into the details of these four pillars, including how to set goals and priorities, gathering facts, summarizing income and expenses, creating strategies, execution, and tracking progress.

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Larry Heller, Not Your Average Advisor.

 

A CFP® (Certified Financial Planner) and a former CPA.

Has helped solve complex financial planning for 20+ yrs.

Member of Wealth Management Think Tank.

A financial advisor think tank that meets monthly to discuss investment strategies and planning opportunities.

Larry is approached regularly by the respected journals.

“Journal of Financial Planning”, and “The Wall Street Journal”.