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Now you have gone through the important steps of identifying what you have now, setting goals and planning how to reach your goals. But, as important as each of these steps is, none of them is as vital as the step of carrying the plan forward and making it work.
A financial plan on paper (or squirreled away somewhere in your PC) can be a thing of beauty in terms of how it meticulously identifies your current assets, captures your vision of the future and plans how to make your financial dreams come true, but if it is not implemented it will eventually just be a dry collection of "what-might-have-beens." The importance of not waiting is illustrated by the following example:
Looking at the above example, John will have almost a million dollars ($968,959) at retirement, simply by contributing $2,000 each year beginning at age 29. But if he waits just one year later to begin his investment plan, and still retires at 65, he will have $863,357, which is $105,602 less!
You may look at the example and raise several objections:
- "I'm not 28 any more, so I don't have nearly as long as John to save for my goals."
- "I don't want to tie up my money by putting it in a retirement plan I may have an urgent need for it in my business."
- "I'm not comfortable investing in an aggressive investment like a growth company mutual fund, so projecting for 12 percent yearly growth is out of the question."
Even if some, or all, of the objections apply to you, they only lessen the amount available at retirement. They don't change this basic fact: no matter what kind of savings plan you choose, your chances of success increase the sooner you put it into effect.
We found it convenient here to use a savings plan to illustrate this point, but our "don't procrastinate" message applies to all aspects of a wealth-building plan, such as budgeting for income and expenses. If you have invested the time and energy in creating a plan that meets your needs, nothing will be gained by waiting.
Before you take the steps necessary to implement your plan, please read our discussion of monitoring the plan, which will alert you to the continuing need to periodically re-evaluate your personal financial plan. If you question whether you should have the advice of a planning professional, we suggest that you read what if you need help?