The CapitalWize Q&A column addresses your wealth management questions courtesy of the Capital Formation Group, Inc.
How can someone plan for financial independence if no one knows what the economy and the markets are going to do?
If the economy, the financial markets, and life itself were predictable, financial planning would be unnecessary. The value of financial planning is to protect oneself and one’s family from the many risks people and their finances are exposed to everyday. If your financial plan contemplates that the markets will go up year in and year out, then it is not of value to you. That is why it is important that as part of your financial independence analysis, your portfolio be put to the test under thousands of possible scenarios. The result should be that in most of those scenarios you do not run out of money before you die. In addition, your plan should address the risk of morbidity and mortality, as well as the strategies for protecting your assets from creditors and other liabilities, like lawsuits and divorce of your children from their spouses, should this happen to them. Predictions should never be a part of a financial plan, projections, however, are necessary to help you and your family have a successful financial life.
John Williams is President/CEO of Capital Formation Group, Inc. www.capitalformationgroup.com If you would like speak with Mr. Williams, he can be reached at (781) 237-0123 or by email at email@example.com.
Any tax advice contained herein is of a general nature and is not intended to provide investment advice nor does it account for your individual investor circumstances. Further, you should seek specific tax advice from your tax professional before pursuing any ideas contemplated herein. This advice is being provide solely as an incidental service to our business as insurance professionals.
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