Synergy has become a popular term these days. There are books available on synergy relating to food, clothing, fitness, and physical and mental health to name a few. As you might expect, the concept of synergy also applies to financial planning. As a comprehensive fee-only financial advisor, I see the benefits in my clients’ progress because of synergic effects.
Synergy in financial planning can only be achieved through connectivity. Think in terms of Sir Isaac Newton’s Third Law: every action has an equal and opposite reaction. Every personal finance move or decision creates a reaction in another area of your financial life. The key is to create positive reactions and not negative reactions.
For example, buying a home that is too expensive will create negative synergy to your cash flow. It will create a scenario that will produce a negative snowball of reactions that can lead to saving less for retirement, a negative cash flow, and possibly bankruptcy.
While negative synergy can create a downward spiral, positive financial synergy can spur tremendous financial growth. An example we can all relate to is saving for retirement. Money contributed into a 401k is tax-deferred;
There are many areas involved in personal finance. Estate planning, retirement planning, taxes, insurance, cash flow, goal setting, investments, and education planning are some of the more common topics involved with financial planning. Imagine the traction that can be generated by constructing a financial plan by integrating all of these pieces. The positive momentum becomes exponential!
Families may employ various professionals to handle their personal finances. A CPA takes on taxes, and a broker covers the investments, while an attorney handles estate planning. Unless these professionals communicate effectively the power of financial synergy is lost. The right hand must know what the left hand is doing. Whether a family uses various professionals or navigates the financial landscape solo, efficient synergic decisions are a must for financial success.
Effective financial planning increases efficiencies across all financial areas, which is synergy. If you feel you are leaving money on the table somewhere in your financial world or feel a lack of connectivity, you should contact a fee-only comprehensive financial planner.
For more information, visit http://www.utahfinancialadvisor.blogspot.com.
About Mr. Jefferies
Lon Jefferies is an investment advisor representative with Net Worth Advisory Group, a fee-only financial planning firm in Salt Lake City, Utah. He is a member of the National Association of Personal Financial Advisors (NAPFA) and a candidate for CFP™ certification. He possesses an MBA and bachelor's degrees in Finance and Marketing from the University of Utah. Lon writes articles for local magazines such as Business Connect and Utah Business Magazine, and he consistently contributes articles to online magazines such as FIGuide.com and FILife.com (by The Wall Street Journal). Additionally, Lon is a platinum expert author at EzineArticles.com. Lon has been quoted nationally in publications such as the NY Times and Investment News.
Contact Info
View Lon's blog at http://www.utahfinancialadvisor.blogspot.com, and visit Net Worth Advisory Group's home page at http://networthadvice.com. Lon can be emailed at lon@networthadvice.com, or phoned at (801) 566-0740.
