At first glance, an investment plan and a financial plan look relatively similar. While there is some overlap between the two types of plans, each offers a unique set of benefits that are key to establishing and maintaining your financial security.
Understanding the differences can help you apply the most appropriate plan for your financial situation, or help you understand how both can put you on a better path to pursuing your financial goals.
Think about investment plans in terms of how you are going to meet your financial goals. Investment plans will tend to focus on your current financial situation and will help you establish how and where you will invest your money. They can also contribute to prospective planning if you need to change your investment strategy.
An investment plan begins with your current financial situation. So, to create the plan, you need to evaluate the assets you have, or those you plan on acquiring and determine where you wish to allocate them—typically in stocks, bonds, or real estate.
The future status of your investments depends on how well you adhere to the original plan while you will continue to add funds along the way. The process can be complicated and nuanced, so it helps to have a trusted partner in your corner. Our team can help you understand your current financial situation, determine your risk tolerance and asset allocations, and make recommendations based on which securities or investments make the most financial sense for you. Your goals are our guidepost, so we’ll help you manage your investments and make the appropriate changes to pursue whatever it is you are hoping to achieve.
On the other hand, a financial plan is about pursuing the future you want. These types of plans help you work toward long-term goals, such as building a stable retirement fund. It will also account for how many factors, your desired retirement age, for example, will affect your plans.
A financial plan considers factors such as your income, tax situation, cash flow, debt, and expenses, as well as your estate and any other assets. Financial plans also account for your spending habits; they are particularly useful if you’re looking to set a budget or work toward specific goals for retirement, such as travel or the purchase of a second home.
Financial plans and investment plans can be complicated, especially if you have specific short- and long-term financial goals. You’ll want to call in professionals with the in-depth knowledge and expertise to help you maximize your finances and make the most of the opportunities available to you now, and in the future.
Whether you have an extensive portfolio of assets ready to manage, or you’re just getting started, we’re here to help. All of our team members at Hapanowicz & Associates are just a phone call or email away, ready to answer your questions and set you on the right financial path. You can also feel free to reach out to me directly at firstname.lastname@example.org.
We look forward to getting to know you!