This is a subscriber-only article. Join Entrepreneur+ today for access

Learn More

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

3 Financial Building Blocks These financial planning basics will keep you on track for the future.

By Scott Bernard Nelson

Opinions expressed by Entrepreneur contributors are their own.

The end of the year is a good time to take stock of your financial life, if for no other reason than it's a noteworthy date and therefore easy to remember. Pull out your financial statements, check with your planner or accountant and run the numbers. How did the various parts of your portfolio do? Is it time to rebalance? Does your logic still hold? Is there a new wrinkle to consider?

With that in mind, I've distilled things to the three basics below. They're not particularly sexy, but keep them in mind, and your personal finances will be just fine.

  1. Financial planning: My first column for Entrepreneur was about how to pick a financial planner. It's still a good idea for most people most of the time to find a good fee-only financial planner (one who doesn't take commissions on investment sales) and draw up a basic plan. Pay the planner's hourly rate, get a financial road map and go back once in a while for midcourse corrections. Get recommendations from friends or co-workers, or find names of planners who might work well for you at napfa.org/consumer/planners or plannersearch.org.
  2. Estate planning: It's the least desirable aspect of your financial life--who wants to ponder their own death, after all? But it's the key to controlling your assets and not sticking heirs with a mess. At a minimum, draw up a will, a living will and a power-of-attorney designation. Find a list of estate planning lawyers in your area by searching under the "trusts and estates" category at martindale.com.
  3. Investment planning: The majority of your investment dollars should be in low-cost holdings that run on autopilot. Index funds and/or exchange-traded funds fit the bill. Rather than try to outguess the market, put 90 percent of your money into a few broad-category baskets and let them ride for years at a time. Spread the investments globally, then spend your time worrying about other things.

Editor's Pick

Related Topics

Side Hustle

Anyone Can Start a Passive Income Side Hustle For Easy Money — But Only If You Know These 5 Essential Tips First.

The rise of digital automation technology has made starting a passive income side hustle easier and more accessible than ever before.

Business News

This Company Promised to Transform Drive-Thrus With AI — But the Secret Powering Its Tech? Humans.

Presto Automation Inc., one of several major players in AI-ordering tech, has made headlines for using off-site employees in places like the Phillippines.

Marketing

Don't Just Babble on LinkedIn — You Need to Carve Out Your Own Niche. Here's Why.

To ultimately unlock the full potential of your LinkedIn experience, you need to establish yourself as a thought leader in a specific niche. This is why (and how).

Living

How to Start a 'Million Dollar' Morning Routine

Restructure your morning with a few simple steps that may help to amplify your energy.

Side Hustle

He Launched His Creative Side Hustle Out of a Garage. Now It's Worth $225 Million.

Tom Humble, CXO and founder of E.C.D. Automotive Design, followed his passion for custom auto design into big business.

Business Ideas

55 Small Business Ideas to Start in 2023

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2023.