Financial Planning: Get Step One Right – Video 379

by | May 17, 2024 | Videos

Financial Planning: Get Step One Right – Video 379

Key Takeaways:
Nothing else matters in financial planning if you don’t get step one right: knowing your cash flow.
You must know what’s coming in and going out every month; understanding your expenses on a monthly basis is crucial.
Building a cash flow report is the first step in financial planning at Mullooly Asset Management, as it drives decisions and recommendations for clients.

Financial Planning: Get Step One Right – Video 379 – Links

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Financial Planning: Get Step One Right – Video 379 – Transcript

Nothing else matters in financial planning if you screw up this one thing.

People ask us all the time “what’s most important part of financial planning?”

Is it knowing when to take social security?
Is it getting the proper balance between growth and income?
Is it knowing whether to be in mutual funds or ETFs (exchange traded funds)?
Is there some kind of tax strategies we should be employing?

I’m telling you nothing matters if you screw up the very first step.  Get step one right.

Now before I tell you that step, I want to share with you that I’m learning to make pizza at home.

And so some of the stupid questions I’ve been asking myself is:
“What kind of stone should I get?”
“How hot should the oven be?”
“What kind of cheese should I be using – part skim?”

You know, stupid questions like that.

Look, none of those things — even matter — if you don’t get the first thing right, when it comes to making a pizza…
And that is the dough.

If you get the dough right, good things are going to start to happen.

It’s okay if you overcook the pizza a time or two, it’s still good pizza!

When it comes to financial planning, nothing else matters, if you screw up the very first step.

The very first step is knowing your cash flow.  Get step one right.

And people say “oh, but that’s so simple, that’s so basic.” Or “I should obviously know that.”

You’d be amazed at how many people don’t really have a firm grasp on their cash flow.

You’ve got to know your numbers.
You’ve got to know what’s coming in every month. You also have to know what’s going out every month. And that’s actually more important — knowing your expenses on a monthly basis.

If you get this wrong, none of these other financial planning topics are really going to even be relevant to you.

They won’t matter.

That’s why we tell people that we “lead with planning” at Mullooly Asset Management.

It’s so important because everything else becomes irrelevant if you don’t have a firm grasp on your cash flow.

All financial planning starts with the cash flow.  Get step one right.

That’s why we begin working with clients by building a cash flow report. It is the first thing that we do.

We do that for two reasons.
Number one, WE want to understand where your cash flow is… where the “cash is flowing!”

That starts to drive our decisions and our recommendations for you, towards things like:
“When are we going to start to turn on social security?”
“What’s the plan for drawing down our 401(k) at work?”
“What’s the proper allocation between stocks and bonds, between growth and income?”

Even planning things like life insurance — or putting together your estate — all of this matters.

Just like with the pizza however, if you don’t get “the dough” right — it’s not going to work! You have to start with step one.

So the second reason why we build cash flow reports is for YOU — for our clients.

One of the things that we found is clients are a lot calmer — they’re more at ease — with understanding where their numbers are, where the cash is going on a monthly basis.

It helps them make better decisions. And not worry, not panic, about this month, next month, or even next year.

This one thing has to be right in order for the entire plan to go well.

Getting a grip on that cash flow is so so important. If you can’t get step one right, none of the other steps are really going to matter.

If you need to get a firm grasp on your cash flow, just get in touch with us.
There’s links below where you can find us.
We’d be happy to talk to you.
That’s the message for today’s video. Thanks for tuning in!

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