Your investments represent only one part of your total financial picture. While investment performance is important to pay attention to, weighing it in context with all the other elements of your financial planning is essential.
A financial expert can help guide you through what your total financial situation can look like – and map out a plan that makes sense for you.
The following components of a financial plan also play a key role in helping you reach your long-term goals:
- Cash-flow management. Are you able to meet expenses and still set aside enough for your goals?
- Saving and investing. Recommendations on your portfolio and savings strategy are based on understanding your risk tolerance, objectives, and unique situation.
- Risk management. This ranges from your need to create a cash cushion to obtaining adequate coverage in the case of death or disability to protect your family and your assets.
- Debt management. The interest you pay on loans and mortgages can make a huge hit on your long-term finances. A financial plan may include restructuring loans or identifying ways to make some borrowing tax-deductible.
- Tax planning. Your investments may offer tax-saving opportunities.
- Retirement planning. Your ideas about when you want to retire and the kind of lifestyle you imagine set the tone for most of your long-term investment decisions.
- Estate planning. Your investments can be arranged to potentially benefit your heirs more tax-effectively.
Professional advice can help you make decisions for your investment portfolio as well as identify needs for specialized tax, estate, or financial planning expertise.