Roshani Pandey is a financial advisor and founder of True Root Financial. True Root Financial is located in San Francisco, CA and serves clients across the globe.

What is comprehensive financial planning and do you need it?

A comprehensive financial plan is a detailed analysis and recommendations surrounding all aspects of your financial life.

But before we do a detailed analysis, we first need clarity around your finances. We get that clarity by doing a balance sheet and a statement of cashflows.

Balance sheet and statement of cashflows

A balance sheet is a snapshot in time of your financial situation – your assets, your liabilities and your net worth. A statement of cashflows, on the other hand, is a projection of your income and expenses from now until the end of your life. After these two steps are completed, we start your financial plan by taking the following steps:

Steps we take to do comprehensive financial planning:

1. Goal planning

Your goals could be sending your kids to college, buying a rental property, buying a business, starting a new business or selling your business and living off of your investments. Each goal has a cost and a timeline and using our financial planning software, we can examine if the goals are feasible or not. If they’re not feasible today, we come up with recommendations to make them feasible in the future by saving and investing appropriately.

2. Investment planning

We plan the investments to achieve the goals you have set out for yourself.

3. Tax planning

This includes using the most tax-advantaged vehicles to save, making sure your business has the right tax structure and in years where you have significant income or sale of assets, using strategies to mitigate taxes

4. Retirement planning

If you’re a small business owner, retirement planning and tax planning often go hand in hand.

5. Insurance planning

This deals with finding out how much insurance you need to get, should something happen to you.

6. Equity compensation

Deciding how much stock options to exercise and when is really important if this is a big part of your total net worth.

7. Education planning

If you have children, planning for their education through tax-advantaged vehicles such as a 529 plan is important.

8. Estate planning

An estate plan consists of trusts, wills and powers of attorney. This dictates what happens to your assets after you pass away.

That, in a nutshell, is a comprehensive financial plan

As you can see, everyone needs a financial plan but your financial plan might be very different from someone else’s as you might need more attention in one area than another. Now, it’s not sufficient to just have a one-time financial plan. That plan has to be implemented and changed as life happens. This is where a financial advisor who knows your full financial picture and that you meet with periodically can really help you. To see how working with a financial advisor can benefit you, book an introductory call with us below:

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