January 2007

Six steps to permanent financial independence

by James Cunningham, CEO Cunningham Financial Group

I'm going to assume that if the title of this article caught your eye, you're interested in money and/or financial independence. I'm also going to suppose you've found a way to align your feelings about wealth with your personal values so you can prioritize wealth building as a goal, and are motivated to take the necessary steps to achieve financial independence. Or, you were okay with the concept of wealth from my last article ("Financial independence is within your reach," The Chiropractic Journal, December 2006).

I can't stress too much the importance of your mental and emotional motivation. The failure to follow through is the number one cause of failure (in my experience, the only cause of failure) in achieving the goals of financial plans I've created for hundreds of clients.

But what are the necessary steps? How do you go about breaking down the monumental goal of creating permanent financial independence into a manageable action plan? How can a strategy be structured so that you can accomplish the innumerable details, little and big, that add up to "a pool of money large enough to pay for all your wants, needs and desires without liquidating the pool of money?"

Over the years, my experience has led me to identify six steps to permanent financial independence. These are the six areas you need to plan for, monitor and maintain to ensure the success of your financial plan.

The six steps provide your plan's basic architecture, the skeleton, if you will. With this basic structure, you'll have a limited number of areas on which to focus your attention and efforts, rather than become overwhelmed with the thousands of minute details of a complex financial plan.

Implementation of the plan is much easier to envision and manage day‑to‑day when you lay it out within the framework of the six steps. You'll have a step‑by‑step map that takes you from where you are to where you want to be.

With a sound plan that you can easily grasp in overview and implementation, coupled with the motivation to follow through, you can't fail to achieve your goal of permanent financial independence.

Here's a quick outline summary of the six steps. In upcoming articles, I'll take you through each step in more detail.

1. Protect what you have. The key to permanent financial independence is ensuring that whatever you start with and all that you accumulate is never at risk again. You need to establish protection from all the risks your assets face.

2. Take control of your cash flow. You need to manage expenses, income, debt and investments with your best interests in mind. I'll show you how to pay yourself first and take back control of your cash flow from creditors and others.

3. Invest your assets wisely. I will help you pinpoint the best investments for you and your goals. We'll look carefully at investments that work for you in many ways: minimal or no risk, solid returns, advantageous tax treatment.

4. Manage your taxes. You'll learn how to ensure that you never lose any portion of an investment to taxes ‑‑ another key to ensuring your financial independence is permanent. Find out why it's vitally important when your invested assets are taxed.

Save for your retirement. This step isn't the same as your overall goal of financial independence. Certainly, it's a key component of your plan, but saving for retirement is just one step toward your larger goal.

6. Leave a legacy for your family. I'll show you how to structure investments and other assets and protect them prudently so that, when you die or become disabled, the proceeds will pass to your heirs dollar‑for‑dollar or more. Permanent financial independence is able to survive you to continue to protect your family after you are gone.

Each of the six steps is an ongoing process. Each step needs to be monitored and, occasionally, even fine‑tuned to ensure that it's staying on track and contributing its share to your overall goal.

The seemingly huge goal of creating permanent financial independence has now been broken into just six steps you can focus on and implement. For additional information on each step, I'd be happy to supply a free audio recording to you.

(Cunningham Financial Group is helping health care professionals all over the country. The company offers national monthly seminars and educational tools to business owners, which are available by calling 480‑443‑0455 or by visiting the Cunningham Financial Group website at www.cunninghamfinancial.com)