The One-Page Financial Plan, by Carl Richards

SketchTo paraphrase John Bogle of Vanguard, there might be better investment books than this, but the list of worse books is infinite.

CERTIFIED FINANCIAL PLANNER™, author, and New York Times “Sketch Guy”, Carl Richards, explains basic investment and financial planning concepts in a simple and understandable way in his new book, The One-Page Financial Plan.

If you are looking to go deep into investment theory, replicate the financial genius of Warren Buffet, or brush up before your CFP exam, this book isn’t for you.

On the other hand, if you are looking for a high level overview of how to create your own customized financial plan – one that is created by you and for you, based on your goals and your needs, then The One-Page Financial Plan is a great place for you to start.

In his own words, Richards has “tried to make the process of financial planning as simple as possible”. He does a great job of that as he bravely shares stories from his own personal experience and from the clients he has served. Kudos to a financial expert who admits that he is financially human – just like you and me.

Why is money important to you?

Richards starts The One-Page Financial Plan by asking this simple question, one that’s not easily answered.

Naturally, he follows that up with an even simpler, but more perplexing question: “Why?”

By this point you start to wonder if you are about to go 20 rounds with Dr. Phil, rather than read a book about personal finance, but these questions are meant to help you understand your values and motivations.

“Knowing your values can make it easy to say no to things that distract us from what’s most important” – Carl Richards

There is no such thing as perfect

You have a life. Things change. Stuff happens. Sometimes reality fails to unfold as you had imagined. A good financial plan recognizes this and needs to be updated and adjusted as circumstances or your values change. That’s a natural part of the planning process.

The question is what to do about it. The One-Page Financial Plan walks you through a four-step process for dealing with the inevitable change that comes with having a life. More importantly, Richards helps the reader understand that it’s OK and there is “no shame and no blame” if you need to alter your course.

9781591847557_OnePageFinancialPlan_JKF.inddOn balance sheets and budgeting

Richards presents simple questions and exercises to help you manage basic financial tasks, like creating a balance sheet or setting a budget.

Most people would rather do just about anything than sit down to create a balance sheet and a budget. Even just reading those words probably makes your eyes glaze over.

My favorite is his take on budgeting. No one likes budgeting. More to the point, no one likes to be told how to spend their money, especially if they are being told by their husband or wife.

Richards’ twists and tricks on these simple tasks takes them from daunting to doable.

Save as much as you reasonably can

This, and other advice, is what I think makes The One-Page Financial Plan work. You already know what you need to know here: you need to save money to reach your goals.

No amount of investing savvy or financial alchemy is going to change this fact. To reach your financial goals, you need to save more money.

The problem is that many people are so overwhelmed with how much they think they need to save, that they don’t save anything at all or they save a lot less than they should. The key, Richards argues, is to save what you can and increase your savings as you are able. Incremental progress makes a big difference over time.

Common sense advice

Someone once said that the problem with common sense is that it’s not so common any more.

Financial planning and creating your own one-page plan doesn’t have to be rocket science. The One-Page Financial Plan provides the reader with simple, actionable, common (and not-so-common) sense advice that will help you get started down the path towards reaching your goals.

If you are looking to gain a better understanding of what it takes to create your own long-term financial plan, the The One-Page Financial Plan is a great place for you to start.

For more information on Carl Richards’ The One-Page Financial Plan and how to get your copy, click here.

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