Plans have a tendency to become out-of-date the moment they are set down on paper. Once you have a financial plan, do not let it get stale. You will want to review your plan often, even when things in your life do not seem hectic or eventful it is important to give your full attention to your finances, and do a thorough review.
Joseph stone capital offers strategies on how to review a financial plan before investing
- While preparing financial plans, one defines several set of goals and objectives to achieve in a given time frame. But you may need to revisit all your goals after certain points in time to adjust the amounts based on the on-going financial conditions. It may happen some times that you have not at all progressed or moved very little towards your financial goal since the time the plan was created. Joseph stone capital says that here it is important to revise your investments and alter investment avenues/instruments.
- From the time you constructed your financial plan and till now, there could have been change(s) in the tax laws in the country or the amount of income you earn. This may result in you falling in a different tax bracket and thus paying tax at a higher or lower rate. In such circumstances, you will need to revise your financial plans to plan your investments and expenses efficiently to decrease the tax liability.
- The balance sheet and income statement of a business may look great on paper, but if the cash is not managed properly, the small business can go under quickly. Part of the financial strategy of the business plan will detail how cash will be used in the business. This comprises identifying an amount that will always be in reserves as well as how major expenses will be paid. By laying out the financial cash strategy in advance, it will make financial decisions easier about when to write a check and when to access a line of credit during normal business practice. Having a line of credit or business loan tactic is also necessary for several business models. A contractor for example may secure a large bid and need to access the cash quickly for overhead. Knowing when to access credit that has a large return is an essential aspect of managing cash flow. Joseph Stone Capital believes that this becomes especially important when securing projects depends on accessing outside capital to fund the project without a long waiting period.