Smart Money Strategy

CHAPTER 6Getting Started: Assessing Your Starting Position

Every journey has a beginning.

If you're travelling, you need to know where you're starting from, where you're going, and how long you'll be away for. You might also need to redirect the mail, drop the kids off at their grandparents' house, or get someone to come and feed the dog and water the plants. Your end destination will also determine what you need to pack at the start. Will you need summer clothes or winter clothes? Will you be sun-baking with drinks by the pool, or will you be taking skiing lessons in the snow?

Understanding your real financial position is essential for the start of a successful financial journey.

Another way to look at it is through the fable about the man who built his house on the rock and the other man who built his house on the sand. When the bad weather came, only one house was left standing. If you build a strategy stack on sand, you should be prepared for the stack to fail. It might be a really good stack and it might achieve everything you want to achieve. But if it's not built on solid foundations, you're going to have lots of problems.

Some people really need to take a deep breath and clear their head before they get started. I've actually seen clients cry because they've genuinely tried to sort out their financial lives and yet they feel like they've failed. Our financial lives can be really difficult to manage sometimes, so I'd say we've all felt overwhelmed in this way at some ...