How It Works
The 10-Step solowealth Financial Plan
Phase 1 – Financial Assessment: soloanalysis
Step 1: Net Worth
The value of your Net Worth is a measure of your wealth. It's the combined value of assets you own, such as the value of your home or investment accounts, minus the combined value of liabilities you owe, for instance credit card debt, personal loans or your remaining mortgage balance.
Your financial goal should be to maximize your assets and minimize your liabilities. It doesn't really matter how much you earn if it's all tied up in debt, unless you expect a return on investment [ROI] for example, an education loan or a business loan.
You should aim to increase your Net Worth year by year. Use the solowealth Net Worth calculator to complete a financial checkup and determine how wealthy you really are instead of how wealthy you feel.
Step 2: Financial Goal
Having a financial goal to strive for whether 6-months, 5 years or 20 years from now, will help to increase your Net Worth. But it's difficult to reach a financial milestone if you don't have a financial target in mind.
If you're asked to save $10,000 this year toward an investment account, this may seem overwhelming at first. But if you're asked to save $835 per month, well now you have an achievable plan to accomplish this financial goal.
By breaking your financial goal down into manageable payments, just like your monthly bills, you're more likely to accomplish your financial goals. Use the solowealth Financial Goal calculator to help you reach a monthly financial goal target within a specific period of time.
Step 3: Cash Flow
One of the most important financial calculations you can make is your monthly cash flow budget. On a monthly basis, you need to track all of your expenses dollar for dollar and subtract it from the income you earn. Otherwise, how will you know where to find financial waste?
By reviewing your monthly cash flow budget, you may discover that you're dining out or shopping for useless items more often than you should. You can then make a decision to trim a specific amount off your next month's budget.
The amount saved can then be contributed toward STEP 2: Financial Goal. Use the solowealth Cash Flow calculator to simplify tracking expenses and answer the question: "where does all my money go?"
Phase 2 – Income Allocation: soloinvest
Step 4: Investment Account(s)
Okay, so you've determined how much you can save monthly to accomplish your financial goal. So, where do you put this money to have it return the favor and work for you?
Traditional investment options such as mutual funds are considered expensive with high fees taking a significant bite out of investor's portfolios.
This has given rise to a growing trend of online wealth management services as an alternative for more accessible, affordable and transparent investment options. Open an investment account today to help you reach your Financial Goal and increase your Net Worth.
Phase 3 – Risk Management: sologuard
Step 5: Insurance
Defense wins the game! This also holds true as a financial planning strategy. Our health and well-being is our greatest asset - if you're not healthy or present, you can't support yourself or your family.
Every day your health or assets are at risk, especially as you get older, start a family or increase your debt load. To help mitigate this risk, insurance provides an affordable solution for optimal financial protection against unforeseen circumstances that may have a detrimental impact on you financially.
Proceed to STEP 5: Insurance to help you determine how much insurance coverage is appropriate and obtain only the coverage you need.
Step 6: Credit Monitoring & Identity Theft Protection
As one of the most common criminal offenses in the nation, identity theft is a lucrative crime for hackers and criminals and only show signs of becoming more prevalent in a technology dependent society.
You can't prevent an attack from taking place, but you can implement defensive measures to minimize your risk of exposure and financial chaos. If in the unfortunate event you were to become a victim, ensure peace of mind knowing you have qualified professionals who have your back.
As one of the most essential defensive strategies available, a Credit Monitoring & Identity Theft protection service is an affordable solution where the benefits vastly outweigh the cost.
Step 7: Debt Management
If your debt has ballooned beyond reason, you need to implement a debt management plan before it spirals out of control. There are multiple options available depending on the type and amount of debt.
Once you take action and manage your debt, you need to ensure the problem does not repeat itself by adjusting your financial habits, improving financial literacy and following a financial plan such as the solowealth financial plan.
Avoid further costly delay and access STEP 7: Debt Management to rejuvenate your financial status and achieve solowealth.
Phase 4 – Household Planning: soloestate
Step 8: Home Financing
As one of the most expensive assets you will own, it's critical that you perform due diligence when searching for maximum savings to finance your residential or commercial property.
Doing so, can make a difference of thousands of dollars saved over the course of your mortgage lifetime. The solutions offered in STEP 8: Home Financing can empower you with the necessary tools, resources and support to help you navigate the complexities of the financing process with confidence.
Step 9: Legal Protection
No financial plan is complete without an estate plan. You don't need to be rich to have one. As long as you own assets as determined in STEP 1: Net Worth, you will need to decide which of your assets get passed on to your chosen heirs.
Don't assume the courts will automatically rule in favor of your presumed heir. More importantly, if you have young children, you don't want ugly court battles to determine their guardians. The same applies for matters related to your health care treatment in the event you are unable to make medical decisions for yourself. Likewise, you should assign a legal authority to manage your legal and financial affairs on your behalf.
Step 9: Legal Protection provides easy access to legal protection & estate planning at a budget that should leave you with no excuses. Don't forget to review the Estate Planning Checklist to ensure your assets and your loved ones are protected.
Phase 5 – Accounting: solotax
Step 10: Tax Management
Get comfortable with challenging the uncomfortable! What was once considered a job best left for an accountant, can now be accomplished solo using simple tools and resources.
Filing taxes may seem like a daunting task, but it's quite rewarding when you become self-reliant using the solutions offered in Step 10: Tax Management.
Once you have completed the 10-Step solowealth Financial Plan, simply review the Financial Plan Checklist to determine the missing components of your financial plan. Your efforts will reduce the risk to your financial security and provide a path to greater financial prosperity!