At WEALTHplan we believe in starting the climb up the financial stepladder with the right foot forward. By confidently planting your foot on the first and most important step you can achieve financial freedom.
Our philosophy is simple and straightforward: “To climb a mountain you must start from the bottom. Rarely is greatness achieved through shortcuts.” The fundamentals behind our philosophy are exactly that – fundamentals.
- Live within your means regardless of your income and
- Build a strong financial foundation to help you withstand unforeseen circumstances as well as lead you to financial freedom
No matter your age or status, the philosophy behind our financial advice is the same. Whether you’re a millennial with student loans, a gen x-er with a mortgage or a boomer looking to downsize in order to retire, the steps to achieve financial freedom are the same.
The Financial Step Ladder
The Financial Step Ladder approach assures a strong financial foundation is in place that can withstand unforeseen circumstances as well as allow for changes along the way. Life is not static. Your priorities change, your resources may change, and so on. If your finances are built on a strong foundation, a positive outcome is far more likely.
STEP #1: POSITIVE CASH FLOW
This is the most important step on the financial ladder. Your income regardless of source should always be greater than your expenses. Monetary inflows should exceed outflows. While this is rudimentary financial planning 101, you’d be surprised how many financial plans break down on this first step.
STEP #2: RISK MANAGEMENT
Having the right type of insurance is absolutely critical. It’s like climbing Mount Everest with a trusted Sherpa. Your greatest asset is your ability to earn income for yourself and those you love. If you lose the ability to earn an income the step ladder will collapse in no time. Having a solid risk management plan in place will ensure an unforeseen outcome does not derail your financial future.
STEP #3: DEBT MANAGEMENT & REDUCTION
Socking away money into a savings account without chipping away at your debt is like emptying water from a leaky boat without first plugging the hole. Eliminating debt, especially bad debt should be your next priority once you’ve achieved positive cash flow and have insured yourself against unforeseen circumstances. Once your consumer debts have been paid down you’ll be well on your way to:
STEP #4: SAVINGS
Savings is simply the difference between monetary inflows and outflows. If there is positive cash flow, you have savings. The first thing to do with your savings is set aside enough to protect yourself against an unforeseen event. For example, a car breaks down, or you’re out of work for a few months. An easily accessible savings reserve will keep you from sliding back into debt.
With the first four steps of the financial ladder behind you we can now get to work on:
STEP #5: GOAL SETTING & PLANNING
Whether your goal is retirement, starting a business or paying for your childrens’ education, you’re now in a position to start planning. You’ve worked hard to get where you are. Let’s work together to reach the summit. One day your money will be working for you with:
STEP #6: STRATEGIC SOLUTIONS
Ensure the financial security you started off wanting when you first started your climb. Are you ready and willing to start the climb up the ladder? If so, let’s discover more about how to get to the top with strategies and exercises to help you along the way.
