The Bare Minimum Financial Plan (Vol 1. No 22)Nov 15, 2021
Hey, hey, hey Amor!
On a recent Instagram post, I said "You can live debt-free in a high-cost area with children and pursue early retirement too mi gente... with a financial plan and patience, so much is possible!"
I immediately got two types of DMs. Some people (🙄Group 1🙄) wanted me to share our income, our expenses, and the city we live in. The other half (😍Group 2😍) wanted to learn how to create their own financial plan so they could reach their own financial goals también.
I have so much cariño for 🙄Group 1🙄 because I was part of that group for a looooong time. When I first started to learn how others were building wealth, I would think...
Well, I'm not a white man.
Houses are over $500k where I live.
Nobody is going to give me money towards a house down payment.
I can't invest money because what if a loved one needs to borrow money.
I can't increase my income because I have an autoimmune disorder.
I don't have time to learn all of this personal finance information because I have two little kids.
I was the person DMing personal finance content creators "Where do you live?" "What's your annual salary?" "Do you have children?" "Do you know anyone who has done this with an autoimmune disorder?" And they would ignore me.
Now that I'm on the other side I understand, that they were not going to spend time trying to convince me that building wealth was something I could do too. They had people asking the right questions and they were going to use their time helping them.
I answered Group 1🙄's questions and also let them know "The right financial plan is going to meet you wherever you are right now and take you to where you want to be con tiempo. It's not going to happen in a year or even five years, it's going to happen poco a poco so focus on creating your financial plan." Only one person said "Thank you." 🤦🏽
Now let's talk about my response to 😍Group 2😍. I shared with them the eight components of a financial plan (bolded below) and I asked them what they needed to learn more about. Based on their responses, I sent them resources. I encouraged them to increase their financial literacy poco a poco and to implement what they learned.
Whether you are more like 🙄Group 1🙄 or more like 😍Group 2😍, I want you to be able to answer the following questions con confianza:
(1) Financial goals - How can you use your money to create the life of your dreams? Where do you want to be financially a year, 5 years, 10 years, 20 years and 30 years from now?
(2) Net worth statement - Where do you currently stand financially? Do you have more liabilities than assets? What's your plan to acquire more assets?
(3) Budget and Cash Flow Planning - How do you make sure you spend less than you earn so you have the extra cash flow to go towards your goals? What systems do you have in place that position you to increase your net worth monthly?
(4) Emergency Funds - Do you have a minimum of three months of living expenses saved in a high-yield savings account so you can avoid debt? Are you losing money to inflation because you are saving too much?
(5) Retirement Plan - How much do you need to be investing monthly to retire at the age that you want? Are you investing in accounts that are tax-efficient now and when you retire?
(6) Debt Management Plan - Do you have a plan in place to pay off any debt with an interest rate above 9% as soon as possible?
(7) Insurance Coverage - Are you protecting yourself from the worse case scenario with health insurance, disability insurance, auto insurance, homeowners'/renters' insurance and life insurance?
(8) Estate Plan - Do you have a will? Are the beneficiaries updated on all of your accounts that require one? Have you established a power of attorney for financial and health care decisions?
If you get stuck answering one of these questions amor, send me an email. If you get stuck answering A LOT of these questions, consider working 1:1 with me to ensure you have the financial plan to make your dreams come true poco a poco. Use this link to learn more. I have two financial coaching spots left for December and it would my pleasure to work with you amor.
Todo con tiempo,