Guiding Principles for Financial Planning

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Guiding Principles for Financial Planning

Principles for Devising a Robust System

Henry Ford’s solution to paying workers for time spent “walking about” was a new system, the assembly line, an idea he adapted from the overhead trolleys used in the meat processing industry. “The first step forward in assembly came when we began taking the work to the men instead of the men to the work,” Ford later wrote. That slight but critical shift in thinking led to a huge leap in productivity. Average production times for a car fell from 21 days to 9 hours. The price of a Ford-made automobile fell from $950 in 1909 to $355 in 1921.†

Like any successful system, Ford’s assembly line was designed around guiding principles.

  1. Each worker would have one task and one task alone.
  2. The line itself had to be “man high” so that workers would not waste time and get fatigued by constant stooping.
  3. The speed of the line was calibrated to ensure that a worker was neither rushed nor left biding his time. “He must have every second necessary,” Ford wrote, “but not a singe unnecessary second.”

Guiding principles for financial planning

Barrons 2016A system for managing wealth also needs a clear set of guiding principles. Through refinements over the years and using my 25+ years of experience with one of the top financial planning firms in Denver*, I’ve managed to trim my own set of principles down to five:

  1. Make your balance sheet, cash flow, and portfolio your friend, not your foe.
  2. Compare your finances to standards of excellence and use them to make enhancements.
  3. Back-test and stress-test your plan under various scenarios to further reveal strengths, weaknesses, and possibilities.
  4. Know what is holding you back, spurring you forward, and serving you best. This will help you have the energy, confidence and focus to support your plan.
  5. Be specific and proactive by identifying and implementing the actions that will result in the best permanent changes going forward.

It is worth taking some time to look at what each of these principles means in practice. I will explore each of these in future posts in the weeks to come.

†Ford, My Life and Work

Joseph J. Janiczek is the founder and CEO of Janiczek Wealth Management. This article is adapted from his book, Investing from a Position of Strength

Joseph Janiczek, ChFC, MSFS

Joseph J. Janiczek, ChFC, MSFS is Founder and CEO of Janiczek® Wealth Management, which exclusively serves high net worth investors (individuals with $2 to $20 million portfolios) and ultra-high net worth investors (individuals with $20 million+ portfolios) across the country. After founding and serving as the president of an oil company, Mr. Janiczek recognized that financially successful individuals were greatly underserved by the investment and wealth management industries.

Mr. Janiczek spent decades in the trenches with those experiencing life-changing liquidity events and ultimately developed and patented Systems and Methods of Optimizing Wealth. He is a pioneer in the disciplines of Evidence Based Investing (EBI) and Strength Based Wealth Management™ (SBWM), award-winning author of Absolute Financial Freedom (Prosperity Press) and Investing from a Position of Strength. Mr. Janiczek’s education includes Master of Science Degree in Financial Services (MSFS) and Graduate Certificates of Specialty in Asset Management and Income and Estate Taxation from the American College. He also has his Chartered Financial Consultant designation. Mr. Janiczek has served as a Board of Governor of Legatus International, President of Rotary International Club and Foundation and Board of Director of Spitzer Center for Ethical Leadership. Mr. Janiczek is the majority shareholder of Janiczek® and leads its executive Leadership Team.

jjaniczek@janiczek.com
(303) 339-4460

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*Ranked/Named among Top, Best and Most Exclusive Advisors sources: Barron's March 2016, 2015, 2014; Advisory HQ March 2016; Financial Times June 2015; Five Star Professional November 2015, 2013, 2012,2011, 2010, 2009; Mutual Funds Magazine January 2001; NABCAP September 2010, 2011, 2013; Worth Magazine July 2002, January 2004, October 2004, October 2008; Wealth & Finance International, October 2014. Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Janiczek Wealth Management is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of Janiczek Wealth Management by any of its clients. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

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