A leader is one who knows the way, goes the way, and shows the way. -John C. Maxwell
For leaders, a defined process of Personal Financial Planning is crucial to their influence—and the reasons go much deeper than self-gain or even for the sake of their own family’s security and prosperity.
A leader’s influence for their greatest purpose is on the line—possibly right now and certainly at some point in the near future.
In fact, isn’t it possible that at a lynchpin moment in your movement (career/ business / organization) that your tribe (followers / fans / team / clients) will size you up in an instant? They’ll decide whether to follow you to the ends of the earth or leave you faster than a speeding bullet simply by assessing the integration of your life.
YOUR life will flash before THEIR eyes, and they’ll evaluate your moral integrity, persistence, passion, initiative, self-discipline, and vision among other things. One of those other things will be how you took your success home—your personal financial success.
I’m not hinting at the flashy, shiny success of your cars, your homes, or your vacations. I’m talking about the success of your Personal Financial Planning and how well you’ve incorporated the high-stakes strategy you use at work into your family’s present and future.
A concerning disconnect between a clear vision and healthy strategy at work and a hint of vague goals and shoddy personal planning will disrupt confidence in you at the most crucial moments of your leadership.
Therefore, Personal Financial Planning must be a top priority for leaders.
The Personal Financial Planning process contains the same elements of strategic planning for any organization. Here are the five keys:
- Goals (Vision): Financial Planning begins with a vision--goals that are based on an ideal future.
- Status and Resources (SWOT analysis): From there, the current status of progress and the resources available to achieve the goals must be assessed.
- Recommendations (Strategic Objectives): Next, a strategic plan must be developed to move your financial situation from the current state of affairs into alignment with your vision.
- Implementation (Execution): The strategic plan must be executed and carried out.
- Monitoring (Benchmarking): Finally, progress to goals must be tracked by benchmarking to financial planning best practices and running scenarios based on personal income, business performance, and investment outcomes.
Leaders need a great advisory team so they are not operating in a vacuum. This team provides a unique perspective and helps the leader avoid blind spots. It provides accountability on the most important issues and encouragement when times are tough. In Personal Financial Planning, that core advisory team looks like this:
- Wealth Advisor (Financial Planner and Investment Advisor)
Your CPA often serves in dual roles: 1) quarterback of your business accounting, tax planning, and tax compliance and 2) as a personal CFO to bridge and integrate your business and personal objectives where they converge.
Your Wealth Advisor serves as a guide to the ongoing process of making financial decisions and executing strategies that help you achieve your life goals based on your purpose and your family’s purpose. This includes the key elements of savings, debt, financial independence (retirement), taxes, insurance, legal documents, charitable giving, capital investments and more.
A trust and estate attorney will help with the preparation of trust agreements, wills, powers of attorney, medical directives, and closely held business structures, including partnerships, limited liability companies, and corporations. They will also help you plan for the efficient and effective transfer of assets to spouses, to younger generation family members, and to charities.
Your advisory team will likely grow over time as your situation evolves. Specialized guidance will be crucial to making consistently wise choices.
Still, as a leader, you should receive proactive input from a CPA, Wealth Advisor, and Attorney regardless of your level of success.
At least each year, like a Business Review Process, leaders should have a personal Financial Summit with their Wealth Advisor to measure and celebrate progress, simulate the possibilities, set and update goals, and create new action items.
In addition to being coachable and responsive to accountability check-ins, suggestions, and updates from their advisory team, a leader doesn’t hesitate to reach out to this team as needed when life happens. Sometimes a little guidance is needed for key decisions or when circumstances change.
Bring to mind your current leader or key influencer: What is your opinion of how well they take their success “home” because of their Personal Financial Planning process? While their exact process may not be obvious, don’t you give them more influence over you because of the integration of their work success into their personal financial success? On the flip side, if a clear dichotomy exists between their success at work and their personal progress and wisdom, doesn’t that detract from their credibility in your subconscious?
So how about you: do you engage in a defined Personal Financial Planning process with a well-rounded advisory team to help you bring success home? If you need to improve in this area, get after it. Your family and your leadership influence depend on it.
The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your accountant, tax, or legal advisor with regard to your individual situation. The above summary has been obtained from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness. Past performance is no guarantee of future results. Investment advisory services offered through Catalyst Wealth Management, LLC doing business as Ridgeline Private Wealth. Catalyst Wealth Management, LLC and Ridgeline Wealth, LLC are not affiliates. The opinions and views expressed here are for informational purposes only. Please consult with your tax and/or legal advisor for such guidance.