Wealth Planning - by Sylvia Lim CGA, CFP www.sylvialim.com

Wealth Planning is a process to help you identify and achieve both your short- and long-term financial goals. This process helps to map a path unique to you, so that you can focus on what to do, step by step, in your personal situation.

The goals you work towards can include:

• Getting out of debt
• Buying a home
• Protecting and building your investments
  
• Planning for your retirement future
• Making intergenerational wealth transfers

Consider these scenarios:

• You work hard all your life but you're still in debt
• You make good money and still cannot afford a decent vacation
• Your home-based business is chugging along but one day, you're diagnosed with a critical illness
• You transferred your family business to your kids and discovered, to your horror, that you now have a big whopping tax bill
• You inherited a large sum of money and cannot decide whether to pay down the mortgage, invest it or just spend it

1. What are some of the misconceptions about wealth planning?

• It's only for the rich
• It's only necessary when you start a family · you're too young (or too old)
• It's too costly
• Budgeting is not necessary because you don't make enough money
• Using a wealth planner means he or she makes all the decisions

2. How can a Certified Financial Planner help you?

S/he can help you take a 'big picture' look at your current financial situation. This may include most or all of the following:

• Your earnings & spending
• Taxes
• Equity & investments
• Insurance
• Retirement planning

Sylvia Lim is the author of Finances After 55, and Personal Budgeting Kit. Sylvia is a Certified Financial Planner and Certified General Accountant with over 20 years of experience providing clients with sound financial advice and services.

S/he will discuss with you your personal and financial goals, keeping in mind your time frame and risk tolerance level. Together, the two of you will decide on what goals are realistically achievable.

Depending on your situation, s/he can then either carry out those recommendations by working with other professionals on your behalf, or guide you through the wealth planning process. Periodically (usually once or twice a year), the two of you should reevaluate your plan to ensure you are meeting those goals and also, to adjust your plans to accommodate new goals you may have due to changes in your lifestyle or circumstances, such as an inheritance, new relationships, new job, etc.

3. What can you do to help in the process?

• Start planning NOW. It's never too late, or too early.
• Be open and honest about your situation with your planner
• Understand there are 'tradeoffs'. If you want to buy a new home and also go on a big vacation in the next year, you probably won't be able to do both. However, you may be able to take a smaller vacation and save up more money to buy that new home next year.
  
  
  
  

  Find more saving and finance tips in Sylvia's books--visit the Books page.