The financial planning process available to forecast and monitor our net income is a daily, weekly, monthly and yearly process. It is not a one time static financial X-Ray or MRI
Given that the planning and forecasting process is an iterative discipline it seems to me that clients should be helped to understand that it is no different than our approach to banking and other investments that we track daily, weekly, monthly and yearly i.e., there should be regularly scheduled reviews identical to those held with our accounting firm. The subject of cash flow is not a static subject. It is, in fact, a moving (often volatile) target. The professional oversight of our longterm financial health (positive cash flow) is no different than the medical oversight we seek from our physicians. They both require ongoing review.
Several generations ago the conditions for retirement which exist today were not present at that time. Employees with companies which provided defined benefit retirement pensions could forecast their future lifetime pension based upon their earnings. Financial planning was no more complicated than being capable of budgeting income and expenses. The complex work of actuarially forecasting lifetime pensions was performed by highly trained professionaks employed in the financial institutions which provided and guaranteed the pensions.
That guarantee has substantially ended. Less than 25% of all Canadians are fortunate emough to have a guaranteed 'defined benefit' pension plan. The remaining 75% are on their own.
Therein lies the problem. Most individuals are neither trained nor experienced enough to quantify their longterm pension capital and income requirements.
It is, in fact, a constantly moving target. Investment planning as an iterative process includes successive approximation - through ongoing professional oversight.
It requires the same professional ongoing oversight as does our physical health. We don't visit our physician with the understanding that we will check our health out again in 10 or 15 years.
The adage "inspect what you expect" is sound advice.
Find a professional practitioner you trust and work with them - openly, directly and collaboratively.
Weigh House Investor Services