Yesterday we looked at the first steps in developing what I’ve called a Purposeful Plan. Today we’ll begin where we left off.
We’re now ready to get serious about painting their overall financial picture in more detail. This entails all kinds of questions, follow-up, forks in the road, and the like. Knowing your complete financial picture is crucial to the ultimate execution of a well designed Plan. Here are a few of the questions that’ll launch that discussion.
How old are they?
What do they do for a living?
Do they like their job, or hate every minute of it?
How much do they make?
Do they have an IRA/401K/ or company pension at work?
Have they bought an annuity of some sort?
Are their retirement goals, including timing, realistic? Specifically, are they too ambitious or are they underestimating what’s reasonably possible?
Then, of course, there’s everything else that popped up during this conversation.
At this point comes a critical decision, based upon my analysis of their fully understood status quo. Should their strategy be designed to produce Capital Growth or Cash Flow?
If enough time is available, a bifurcated strategy will be designed. Capital growth on the front end, followed by an ordered transition to cash flow as retirement nears.
If cash flow is the immediate goal, the tactics change. Remember, to the extent the real estate investor goes for either cash flow or capital growth as their primary goal, the other will suffer. Those who insist both can happily coexist are either dreaming, or buying property where you and I would never put Mom to live alone.
BawldGuy Axiom: Whether we opt for capital growth or cash flow, the other will suffer. There’s no way out. In baseball parlance, you can’t throw a fastball and a curveball on the same pitch. Pick one.
Bottom line? 95% of the people with whom I talk need to growth their capital first.
Let’s not gloss over the key factor of time when designing your Purposeful Plan. It’s pretty simple: Is there enough time to attain the stated goals? If so, it’s time to pull the trigger. Don’t delay.
The #1 lesson most people should understand with crystal clarity is that whether you have 25 years till retirement, or less than a decade, there’s one factor both timelines have in common . . .
Time is never your friend.
Next up, we’ll talk about a factor in your Purposeful Plan so important, I won’t work with anyone who doesn’t agree to it. I’ve made less than 10 exceptions to that rule in the last quarter century. Yeah, that important.
If you’ve gotten to the point your retirement is beginning to look different than you originally planned, gimme a call. 619 889-7100 will find me. Have a good one.
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