More than a mere structure, your financial plan creates the blueprint for the life and home you live in. What does it take to build a financial home that will withstand the test of time? Join us as we lay out the similarities between constructing a plan and constructing a house.
(Click the featured times below to jump forward in the episode)
Whether you are handy around the house or can barely hang a photo on the wall, there’s a lot of similarities you can understand between building a house and building a financial plan. On today’s episode of Cover Your Assets KC, David shares what you should know when it comes to building the financial structure you call home.
It’s important to start with a strong foundation. What is the foundation of a financial plan? Your income plan is at the base. When you’re younger, this typically comes from a paycheck at work. When you’re retired, what are your income sources?
While a foundation is important, the walls helps the house take shape and create a shelter. Your financial walls are your investments. Do your investments complement your income? Do the walls start shaking when the market faces volatility? You need to have investments and structure them correctly to meet your needs and goals.
What do these walls hold up? The roof, of course! What covers your investments and assets? Insurance provides protection over your financial home. What kind of insurance do you need? How will it benefit your loved ones?
In a house, the finishing touches are things like picking the counters and flooring and wall colors. What are the finishing touches for your financial home? An estate plan doesn’t need to be complicated, but it can customize your beneficiary designations on your assets and help you avoid probate. Do you have powers of attorney set up? Estate plans might sound fancy, but it is not only for the extremely wealthy. Make sure you have the things you need in place to feel at peace in your financial home.
Listen to the entire episode or click on the timestamps below to skip ahead to a particular part of the building process.
[1:50] – What goes into building a house?
[3:13] – Building a financial plan can feel daunting.
[3:48] – What is the foundation of a financial plan?
[6:50] – What are the walls of your financial home?
[8:42] – What covers your financial house?
[13:09] – What are the finishing touches?