“To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.” — Stephen R. Covey
A financial plan is a roadmap to your dreams — and, if you identify a clear direction from the beginning, it can last you a lifetime.
Start by imagining a fulfilled dream or destination on your journey. Work within a timeframe that feels good to you — you can plan just 10 years out or you can map out your retirement. Once you set your end goal, begin to work backwards to chart the path of your financial plan.
Here are some example destinations:
I want to buy a house.
I want to live at the beach.
I want to travel.
I want to be my own boss.
I want to live off passive income.
I want my child to graduate college debt-free.
I never want to retire.
I want to give to others during my retirement.
I want to retire at 50.
Once you’ve determined your end goal, you can allow the details of your financial plan to unfold. For now, understand your direction and own it fully. Then, talk it through with your partner, family, or trusted advisors.
When you pause to consider where you want to be financially, you’ll start to see the next steps you must take to get there. You’ll get a sense of how long it might take, whether it’s realistic, and what you need to do to keep moving in the right direction. Nothing is set in stone. You can adjust your plan as needed. For now, keep it simple. Take the first step and begin to imagine where you want to be in the future.
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