All Things Financial Planning Blog


I Don’t Understand My Financial Plan

Get Your Questions AnsweredRecently reflecting on some of cinema’s greatest intellectual quotations, I was reminded of movie Detective James Carter’s infamous query in 1998’s Rush Hour. Chris Tucker’s character eloquently asked Jackie Chan’s character, Chinese top cop Detective Lee, “Do you understand the words that are coming out of my mouth?”

Ok, maybe not one of the most memorable moments on the silver screen, but a funny movie that stands up well fifteen years later. But, that’s not what we’re here to discuss. The quote actually jumped into my head during a discussion about how we communicate with one another, especially in advice-based relationships.

A seemingly infinite amount of information is available on virtually every issue known to humankind, all searchable within seconds from any place with access to the World Wide Web. How we process this information, understand its meaning and filter the good, the bad and the ugly really depends largely on whether or not the information is communicated in a manner we can comprehend.

This certainly has its applications in the world of personal finance. I’d argue the personal finance industry at-large, more often than not, adds layer upon layer of complexity to relatively simple concepts in order to add an air of sophistication and justify an unnecessary amount of cost. I won’t go further on that today except to say that if something sounds too good to be true, you can’t understand it, what it costs and what risks are involved, run away.
Instead, I want to focus on the authentic struggle many financial planners and advisors have in working to develop the right communication strategy based on their clients’ needs.

Scalability allows a company to grow, taking a successful model and increasingly diluting it for consumption by an increasingly growing audience. The problem with scale in the financial planning business is that those seeking advice are all at different points in their lives, with different goals, different resources to meet those goals and different ways to achieve success in meeting those goals.

We also all comprehend things differently, learn through different stimuli and apply concepts to our daily lives at different speeds. Confused? Me too. What does all this mean?

It means that we have a gap in the relationship between financial planning professional and client that both sides have to work to fill. Financial planners need to ensure they have a process in place to help identify how best to communicate concepts and recommendations in a manner that best suits each client involved.

The client, on the other hand, has the duty to speak up when they don’t understand something in their plan, be it an investment recommendation, the path to reach a savings goal or a concept or term used to illustrate a point or answer a question. “I don’t know” or “I don’t understand this” are not only acceptable responses to questions posed or information presented by a financial advisor, but should be a welcome opportunity for the advisor to take an improved approach in helping the client comprehend, thereby teaching the advisor a little more about communicating with their client and challenging them to find better ways to illustrate concepts in the future.

The bottom line is, we all need to be more vigilant about what we understand about the decisions we make and are made for us in our daily lives. When it comes to an advice-based relationship, the more we question, challenge, and discuss, the deeper, more rewarding the relationship will be. Wowing someone with the ability to use big, complicated words to make a point isn’t a talent. Effectively communicating in a manner that gives your audience the best opportunity to understand is.

Chip Workman, CFP®, MBA
Lead Advisor
The Asset Advisory Group
Cincinnati, OH



How often in life have you been able to accomplish something without first defining what it is that you’re attempting to do? For example, have you gotten a new job without first deciding to apply for it? Did you purchase a new car without first contemplating your options and then deciding it was time for an upgrade? It’s likely that in each of these circumstances your first step was to identify your goal(s) and from there establish a plan of attack to reach them. The same scenario applies to organizing your financial life. One of the very first steps in financial planning is setting goals. Setting goals allows you to define your hopes and dreams for your future, both short and long-term.

When thinking about and setting your goals, ask yourself what would have to happen in the next 3, 5, 10+ years in order for you to be happy. From there, begin to document and shape your goals and ensure that they are S.M.A.R.T.
S.M.A.R.T. goals are:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Timely

For a goal to be specific, the more details, the better! You want your goals to include as much information as possible. For example “I want to save $25,000 for a down payment on a home in the next 4 years” is a goal that answers “how much?” “how long?” and “what for?”

Measurable goals should enable you to monitor your progress. How close are you to meeting your goal? How much more do you need to save?

Attainable goals are those that are realistic in nature. While we may all want to win the lottery or have a huge house or great new car – your goals should be set within reach. Perhaps maxing out your 401(k) contribution, taking advantage of a Roth IRA, or building up a sufficient emergency savings is a good place to start.

You want your goals to be relevant to your life. Your goals should reflect your and your family’s needs, values, and desires. Make sure your goals are meaningful to you or else you won’t be motivated to achieve them.

Timely goals are those that come with a deadline. Ask yourself how long it will take you to accomplish your goal. Working within a timeframe allows you to better track your progress.

When setting your financial goals, remember to write them down, prioritize them, and keep them in a place where you can see them often. Include your significant other or family in the goal setting process to make sure you’re all on the same page. Your goals will be the groundwork of any financial plan you create. Not only will having clear vision of what you hope to accomplish keep you on track, but you will be inspired to stay organized and turn your dreams into a reality.

Mary Beth Storjohann, CFP®, CDFA
Senior Financial Planner
San Diego, CA


Do You Have Hope?

I was talking to someone about the forward thinking concept last week (I wrote about that concept in my May 23 blog, Forward Thinking). Pam works with low income people helping them accumulate assets. Several studies have shown that accumulating assets does more to get people out of poverty than other strategies alone (education, improving income, access to credit, etc.). She mentioned that to get people thinking long term, you have to give them hope.

Think about the people in your life. Do they give you hope or do they hold you back?

I have heard a few financial advisors who believe their job is to tell clients what is realistic. They think they are helping clients stay grounded in reality. Instead, they are holding their clients back.

Mark Zuckerberg and Sergey Brin did not build their firms by focusing on realistic goals. Young adults do not move out of poverty by having realistic goals. People do not write books, complete ironman triathlons or make it to the Olympics by having realistic goals. Yet a few people do each of these things. They have hope.

In Lighting the Torch, George Kinder and Susan Galvan suggest that your advisors should not help you to understand realistic goals. They believe that what is realistic for you might be holding me back, that my stretch goal might be your minimum standard. Kinder and Galvan recommend that you align yourself with advisors who will help you assess what will be needed to achieve your goal and then encourage you to take those steps that will get you there.

Do you surround yourself with people who help you understand that difficult goals will require effort and encourage you to make the effort? Does your entourage give you hope to achieve your wildest dreams?

John Comer, CFP®
Comer Consulting, LLC
Plymouth, MN

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Mutual Accountability

Business CoachWe talk a lot at the financial planning firm I work for about mutual accountability. In fact, it is part of our vision statement. What it means to us is that there are responsibilities for both the advisor and client in maintaining a healthy relationship designed to successfully meet our clients’ goals.

For advisors, that means being diligent and putting together sound advice and plans that serve the best interest of the clients and families we gratefully spend our careers serving.

But, we must also expect clients to be accountable for carrying out those plans and letting us know when goals or situations are in flux. Without proper execution, the advice we offer will never amount to much. Despite what many think, long term success occurs less in the swings of the stock market and more in the mundane financial decisions we make every day.

So what happens when we deviate from those plans?

See if this analogy hits close to home. You’re making an ongoing effort to eat less. Maybe you’ve consulted with a dietician, attended a Weight Watchers meeting or sought advice on the Internet. You put a plan together designed to meet your goals. Then, one night you decide to splurge. It might be a trip to the fridge for an extra bite of leftovers or a quick cookie in the pantry.

Do you own up that you’re making a conscious choice to go off plan? Or, do you “sneak” the quick indulgence? Hide it from a spouse or your children? Claim ignorance at your next meeting as to why the pounds aren’t melting away?

Have you ever thought about why?

It’s ridiculous, really. That cookie isn’t adding calories to anyone else’s diet. It isn’t breaking their rules. The person you’re really hiding from is yourself. You’re avoiding accountability.

Are these types of indulgences the end of the world? It depends. Does one cookie become a whole sleeve? Does twice a month become a nightly ritual? How badly are you willing to sabotage your long term goals for short term enjoyment?

The same is true with our personal finances. We all have places we turn for financial planning and advice. Financial planners, investment managers, and sources like this blog or other Internet resources can be full of valuable, insightful information. Either way, we might receive some useful advice or read a particularly relevant article and decide to commit to making a change in our financial lives, just like with our diets.

What happens next is crucial. Do we carry it out? Do we save a little more? Spend a little less? Or do we quickly find ourselves back at square one after too many instances of whatever the financial equivalent is to an extra bite of cheesecake when no one’s looking?

Unfortunately, like our waistlines, accountability will eventually rear its ugly head. We can spend that extra dollar when no one’s looking and cheat our responsibility to our future selves all we like. In the end, we will have no one else to answer to when important goals go unmet. No one has the kind of stake in your future that you do.

There are wonderful advisors and tools out there to help you build a path to meet your lifetime goals, but the path is really all they can show you. The decision to walk down the path is yours. Sure, you’re going to stray from time to time, just don’t get so far off course that you can’t find your way back. Keeping those diversions to a minimum and letting your trusted sources know when they occur will help ensure the needed corrections will be relatively minor.

Chip Workman, CFP®, MBA
Lead Advisor
The Asset Advisory Group
Cincinnati, OH

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Stress Test Your Financial Health

Take this financial checkup, and in ten easy questions, you will know which essential aspects of your financial plan are healthy and what needs attention. Your score will also give you clues about the level of risk in your investment strategy that’s healthy for you.   

Circle the answer that best fits your situation and tally up the total at the end. Ready, set, go! 


  • 10 Points: I know my goals, and their estimated cost and timeline.
  • 5 Points: I have goals, but don’t know the details yet.
  • 1 Point: The future looks really fuzzy and it’s too hard to set goals.


  • 10 Points: My income, from sources like my job,  investments, pension, Social Security etc. is reliable and grows each year, and is more than enough to pay the bills.
  • 5 Points: My income is enough to pay the bills, but I’m worried that my income may not be enough in the future.
  • 1 Point: There’s barely enough to pay the bills.


  • 10 Points: My job is secure, and my skills are in high demand.
  • 5 Points: My job is pretty secure, but it could be difficult to find another job at the same pay. 
  • 1 Point: I need new skills to find a decent job in today’s economy.

Cash Reserves:

  • 10 Points: I have cash savings equal to at least half of my annual income or expenses.
  • 5 Points: I have cash savings equal to less than half of my annual income or expenses.
  • 1 Point: Cash in the bank? I wish. 


  • 10 Points: I’m saving 10% or more of my annual income.
  • 5 Points: I’m saving 1 – 9% of my annual income.
  • 1 Point: Saving? No can do.  


  • 10 Points: I pay all my debts on time and in full. (Or, I have no debt at all.)
  • 5 Points: I can afford the monthly minimum payments on my debts, and sometimes a little more.
  • 1 Point: I don’t know how I’m going to repay my debts.  

FICO Score:

  • 10 Points: My FICO score is good enough to get the credit I need without paying a premium.
  • 5 Points: My FICO score isn’t as good as I want it to be, but I’m working on a plan to improve it.
  • 1 Point: My FICO score makes it difficult for me to buy a home, buy or lease a car, rent an apartment, or get a cell phone.    

Health Insurance

  • 10 Points: I have health insurance and use it.
  • 5 Points: I have health insurance but hesitate to use it because it costs too much to get medical care.
  • 1 Point: I don’t have health insurance right now.

Life Insurance

  • 10 Points: People (like a spouse and children) depend on me financially, and I have life insurance equal to at least four times my income. Or, no one is financially dependent on me, and I have life insurance equal to at least one year’s income.
  • 5 Points: People depend on me financially, and I have life insurance equal to at least 2 times my income. 
  • 1 Point: People are dependent on me financially, and I have insurance equal to less than 2 times my income.

Estate Plan:

  • 10 Points: My will, durable power of attorney, and healthcare power of attorney are up to date.
  • 5 Points: I have an up to date will, but not a durable or healthcare power of attorney.
  • 1 Point: I just haven’t gotten around to updating or completing my estate plan. 

My Total Score:   _____________

 Your Financial Health Assessment:

Score What This Means for My Financial Health & Investment Strategy
85 – 100 Congratulations! Keep up your healthy financial habits and decisions to maintain your financial strength. With a healthy financial base, you have strength and resiliency to cope with the ups and downs of the investment markets. You can consider having some, but not all, of your investments in risky assets, like stocks and stock mutual funds.
50 – 84 Good start! You’ve made some progress towards financial health, but don’t stop here. With expert help or on your own, address one essential area at a time, and work on making it stronger. Until you improve your overall financial health, play it safe with your investments, with little to no risky assets, so that you don’t put the savings you do have at risk of loss.
Under 50 Get help now, and avoid the stock market completely. It’s never too late to improve your financial health. It’s not easy to make changes in your financial situation, habits, or mindset, but it is possible to take one step at a time to create a new financial future. Do it for yourself, and for the people you love.

Plan Well. Live Well.

karinMaloneyStiflerKarin Maloney Stifler, CFP®, AIF®
True Wealth Advisors
Hudson, OH

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Insider’s Guide to Finding a Financial Planner

“Hi, I think I’m interested in a financial planning but I’m not sure of the scope of a financial planner. My priorities are reducing my personal debt, planning for retirement and planning to support an aging parent. Would a financial planner design a debt-reduction budget as well as a long-term financial plan?”

Answer –

Finding a financial planner is, in many ways, similar to finding a family doctor. Many characteristics that help define a “good” doctor also apply to a good financial planner. A good financial planner should be able to understand your needs, desires, and fears, and be able to distill all that information down to an understandable and actionable financial plan. 

Of course, financial planners come in many different forms and it is extremely important for you to understand your options. Are you looking to work with a financial planner on an on-going basis? Are you looking for someone to analyze your current situation and provide you with an action plan? Or are you looking for someone to help you review your situation annually once the plan is set up? You should first have a clear understanding of your needs before contacting a financial planner as it will help you narrow down your search quite a bit. 

Keep in mind that financial planners are paid in several different ways, including commission-only, fee-only, salary, or a combination of these methods. In general, you may receive more objective advice from a fee-only planner who doesn’t have an incentive to steer you toward a particular investment or insurance product. The only downside is that the fee you pay a fee-only planner might be higher than what you’d pay to a commission-based planner. Financial planners typically work with you in person, but also may be able to consult with you over the phone

It is also important to keep in mind that many planners specialize in different areas of financial planning. Some may specialize in retirement planning, while others may focus on insurance planning. Some financial planners might even have expertise in college planning or elder care planning. It is important to ask plenty of questions about the planners’ expertise and qualifications before engaging them in an on-going relationship. 

Here is a list of things that a qualified financial planner can help you do –

  • Set realistic financial and personal goals
  • Assess your current financial health by examining your assets, liabilities, income, insurance, taxes, investments, and estate plan
  • Develop a realistic, comprehensive plan to meet your financial goals
  • Put your plan into action and monitor its progress
  • Stay on track to meet changing goals and circumstances
  • Keep you informed of changes in the industry, markets, and tax laws that may affect your plan.

So how do you get started? You can start by asking for names from friends or business associates that you trust. You can also approach your attorney, accountants, insurance agents, bankers, or other trusted advisors. You can also obtain a list of financial planning professionals through the Financial Planning Association website.

Best of luck in your search for a financial planner who can help you meet your goals.

Andrew B. Chou, CFP®
Senior Portfolio Manager
Westmount Asset Management, LLC
Los Angeles, CA


So What’s My Motivation Here?

If you‘re reading this blog, you’ve at least taken some initiative to learn more about financial planning. Topics abound from setting goals to investment strategies and checklists for just about any area of planning you have an interest in. Whatever the reason for your visit, you’ve likely either done or are contemplating doing some sort of financial planning whether on your own or with the help of an adviser. But let me ask you this…

“What brought you to this point in the first place?” Said another way, what’s motivating you to go down this path?

The best plan in the world does no good if it sits on a shelf, on your computer or on a piece of paper without being implemented. The biggest reason plans fail to be implemented is that you forget your motivation. If you’ve defined your goals effectively, you may think the goals themselves are motivation enough, but they’re not. Take for instance weight-loss goals. How many people make New Year’s resolutions about this only to give up and indulge in that endless chocolate on Valentine’s Day? Is the goal weight alone what motivates someone or is it more than that, such as how they’ll look or increased energy? Or, is it the potential of a greater confidence level? These are just some of the possible motivators of what’s important to someone and why they want to lose the weight. The same applies to financial planning.

Since this blog is about making financial decisions, let’s focus by first answering this question for yourself—what do you value most about your financial health? Maybe it’s freedom, security or maybe it’s something else. Write it down. There is no wrong answer. Now ask yourself what’s important about that to you? Write it down below your first answer. Then ask what’s important about that to you? Repeat the process as many times as you need until you reach an answer that for you is THE most important to you. For example, if the answer is freedom, then answer why freedom is important to you. If you are younger and just getting started on your own, it may be that freedom allows you to not have to borrow from your parents, which may lead to the answer of independence, and so on. You may be surprised by the answers you come up with.

What you now have in front of you is your value set, your motivation and yours alone. It means everything to you. It is why you make the choices you make. These are the things you want to feel and be, to yourself and to the people you care about. This list should be your benchmark for the decisions you make in life. Use it, refer to it, put it on your refrigerator or better yet, tape it to your mirror so it’s the first thing you see every morning. When you feel your focus drifting or you have a tough decision to make, read this list as a reminder of what’s most important to you. Now that is what I call motivation.

By Andy Van Ore, CFP®
Special to FPA