Reach your Financial Goals—Create an Action Plan

Define your financial goals and once you know exactly what you want, create an action plan to get you there. Rely on the support of your financial team to identify key action items and follow up regularly. The following is adapted from “Loopholes of the Rich” by Diane Kennedy, CPA

The best plans in the world don’t mean a thing if you never implement them. If you truly trust your team, have provided all of the necessary information to them, and have jointly created a strategy that leads to what you really want, it’s now time to take a deep breath and just do it! There are a number of schools of thought on how to implement.

Some people like to just jump in, feeling that in the chaos something good will happen. That’s one strategy, and who knows, you just might get lucky enough to actually create what you want out of it. Other people get themselves psyched up with numerous positive affirmations. That’s a great strategy if your goal is to get yourself psyched up. But you’re going to need to take action if you really want anything to happen. The method we recommend involves looking at what you want to create, and then creating a step-by-step strategy on how you can achieve that.

This next step might seem the most uncertain for you, as you start putting your plan into action. You might need to take action to investigate and start a business. You might need to get more education about the types of investments you need to make. Your advisors will be the ones to help you decide what your own personal action steps should be.

It’s hard to know what to do first when you’re just starting your business and investing career. When should you implement all of the steps you’ve envisioned for your future? Generally, I recommend that you are certain that you will begin a business, not just have an idea you might, before you form a business structure. The same is true for business structures for your investments. Make sure you’re truly going to have the investments before you start the business structures. Otherwise, you can end up with having spent considerable time and energy setting up the structures and not even needing them. Even worse, if you set up a corporation and then later discover you won’t need it, you will have to form a plan of liquidation with the IRS and file dissolution papers with your state governing agency. The moral is: Be certain of your business before you form the structures.

Recordkeeping Requirements

The best time to start these systems is right away! I’ve found that if my clients wait until year-end to figure out what their income and expenses for their business actually are they’ve lost the ability to plan. They’re also going to pay a great deal more for the bookkeeping at a time when bookkeepers and accountants are too busy with tax clients for this type of work. Plus, chances are you’ll forget about some expenses or lose some of the necessary documentation. The answer to all of those problems is to start immediately with your bookkeeping requirements.

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