Money Talks: Do I Need a Financial Plan?

Written by: Cale Dowell

Developing a clear picture of your financial future is no small feat – even the world’s biggest companies invest in entire teams to help forecast revenue and expenses. Just as high-capacity companies have a fine-tuned strategic plan for growth, high-capacity families need one too.

However, a recent report from Charles Schwab found that only one in four Americans has a written financial plan. And of those without a financial plan, 68% are living paycheck to paycheck. Moreover, at many of the large financial institutions, less than 10% of financial advisors offer a financial planning service to their clients.

Houston… we have a problem.

As your personal assets grow, they may eventually become another business to run. Think about it this way: would your company let a $5 million department budget go unmanaged? Most businesses would talk about it ad-nauseam. There would be line item for every dollar, a plan to minimize expenses without limiting revenue, and a strategy for how profits are reinvested. Quarterly meetings would ensue to make sure key team members are on the same page.

Now let’s imagine you have a $5 million liquid net worth. Maybe it’s invested or maybe, since 2008, you like having a pile of cash. Either way, do you treat it like you treat the budget at work? Do you have a strategy and a purpose for it? Have you talked about it with your spouse? With your kids?

If you’re anything like me, my time with family is sacred. Anything remotely involving finance, budgets, investments, etc., is the last thing I want to think about, let alone talk about when I'm at home. And herein lies the problem.

That imaginary $5 million liquid net worth goes undiscussed. There’s no plan for it. Key team members (my family) aren’t on the same page. There’s no purpose behind the dollars outside of day-to-day comforts. The “home business”, at best, is being managed poorly. At worst, it isn’t being managed at all. If I were operating the $5 million budget at your company, I would be fired.  So how do you combat this?


5 simple steps to start:

  • Start with why. Does your money have a purpose? What do you hope it has accomplished 150 years from now? Knowing the destination helps you make a plan.

  • Make a plan. Unless you make financial plans for a living, use an expert.

  • Hire a COO. Who is operating the day-to-day management of your wealth? Your personal finances are another business to run. Invest in an expert or a team to manage the day-to-day strategy.

  • Make sure your team members are on the same page. It’s one thing for your spouse to know the family net worth. It’s completely different for them to know all the nuances of where the money is, how/why it’s invested, how it impacts the estate plan, and what its purpose is. Moreover, consider the kids. Your net worth will have a dramatic impact on their lives. Are they on the same page?

  • Prepare the next generation. Will the next generation inherit all or a portion of your net worth? If so, are they prepared for it? Will they manage it well? Work with an multi-generational advisory team that specializes in helping you prepare the next generation.


According to the Schwab report, over 60% of people with a financial plan feel financially stable compared to 32% of non-planners. There’s a quote by Sir Terry Pratchett (author of Discworld) that provides appropriate context:

“If you do not know where you come from, then you don't know where you are, and if you don't know where you are, then you don't know where you're going. And if you don't know where you're going, you're probably going wrong.”


To drive this point home, a study conducted by researchers at the Williams Group surveyed over 2,000 affluent families over 20 years. They found that 90% of wealth created in the first generation is completely depleted by the third generation. What did the 10% that lasted do differently? They invested as much time and energy in their family as they did in creating their wealth. 

The smart builder starts a project with the finished product in his mind. He knows what he wants the finished product to look like. He has a blueprint. He counts the cost to build it. And, after ensuring he has the budget to complete it, begins to start construction.


Do the same with your personal finances. Start with purpose, make a plan, count the cost, and live abundantly.





Cale Dowell serves as Chief Operating Officer for Archetype Wealth Partners and resides in Houston with his wife Lynne and their two kids. Cale is seeking to create a paradigm shift in the way the financial services industry serves and impacts people. Archetype exists to help families thrive across generations.


Disclaimer: Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

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