Your Financial Movie

It is scary to me that people will spend a full evening sitting in front of the boob tube watching Hollywood celebrate the year of moving pictures, but people do not sit down and take an evening to go through their own financial picture.

What does your financial movie look like? Is it a docudrama on how not to behave? Is it a comedy – of errors like many? Is it a tragedy – you feel that you are a lost cause? What type of movie is it?

Most movies take a long time to film given that there is so much footage that is not used, scripts that are re-written and circumstances beyond anyone’s control. In the end, a finished product that has been worked on in fine detail and is evidenced by how wonderful it flows from start to finish. Our financial movies do not have such a luxury to re-write or re-shoot so the planning that must occur is paramount (yes forgive the horrible pun).

The number of “financial planners” or “financial reviews” etc. is astounding, but the one thing that is generally not found in them is the focus on the area of cash flow. Akin to the script in a movie. If every actor simply got on set and started to ad-lib imagine what the finished product might look like – no not a Woody Allen film.

So the primary focus of any solid financial plan is on the management of your cash flow.

Why do so few advisors or reviews or plans not spend more than a mere second on the area of cash flow – because the commission, compensation, recognition, etc. is so minimal. The mutual fund salesperson gets paid on the amount of your assets that are invested; the insurance salesperson gets paid on the amount of insurance that you implement; and the bank advisor gets paid on the number of accounts/ products that you have with their financial institution. This is likely the reason that so few people have worked through a budget with anyone other than the capital B when you have rented a car.

Do you know where your pennies are being spent? I doubt it. I don’t even know to the penny where mine are going. In fact, in my whole career, I have seen less than five people who have budgeted to the penny. They are very analytical people, but the common thing with all of them is that they are so far ahead of where most people are financially at their age it is unbelievable. What is believable though is the knowledge of your pennies allows you to plan with purpose rather than with a guess.

So as far as I am concerned, when someone hires me to help them financially, it makes me more money in the long run to spend as much time on cash flow management as is needed because then I can advise properly what a client does or does not need.

If you think I can be your Spielberg, then give me a call and we can start to work on your financial movie.