The foundation of financial success starts with an understanding of your current financial position. Your advisor should be an advocate in evaluating your available income and other income streams, ongoing expenses, assets and liabilities. Your financial journey must start with a realistic view of where you stand today. Questions a good advisor will ask include:
What’s the status of your current mortgage? What’s the term and interest rate? Why did you choose this type of mortgage?
Do you have a car payment? Are you leasing or did you purchase?
What are your other debts and liabilities?
What type of benefits do you have at work? Are you maximizing them?
This step is crucial to develop a baseline to work from, so all parties know exactly what’s going on. The old adage, “If you don’t know where you’re at, then you won’t know where you’re going,” sums up this position pretty well.