The Business of Trucking

Step-by-step planning for retirement

We’ve given you many ideas on how to be more profitable. Today we’ll give you some ideas on what to do with that profit. Let’s start with a concept called “asset allocation related to financial projections for your post-earning era.” That’s a fancy term for saving for retirement.

Let’s walk through the financial planning process, step by step: 1. Determine where you are now; 2. Create a small emergency fund; 3. Eliminate consumer debt; 4. Finish the emergency fund; 5. Save for retirement; 6. Save for other goals.

Step 1. Determine where you are now. Before we can create a plan, we need to know where you stand now. We need to know how much money you owe to any creditor—things like mortgage, car loans, credit cards, personal loans, consumer loans, taxes, etc. Include any money that you owe to anybody for any reason.

We also need to know how much you own. For instance, if you own your home, how much is it worth. Do you have any savings accounts, investment accounts, retirement accounts? What is the value of your personal property, cars, furniture etc.?

These two numbers together will equal what is called your net worth. Think of it like this: If you sold everything you owned and then paid everybody you owe money to, how much would you have left over? That number would be your net worth. Don’t be surprised if the number you come up with is a negative. Many Americans today have a negative net worth. Good financial planning and some hard work and discipline will get that number back to the positive side.

The ultimate goal of any financial plan should be to create the highest net worth possible prior to retirement. The ultimate goal is to wake up one morning and have enough money so that you have complete control of your life. You could then determine if you want to work or not. My goal is to have enough money and resources to be completely financially free by the time I am 55, but I don’t think I will ever stop working. Having the money will just allow me to choose exactly what it is I want to work on every day.

Check back next month and we’ll continue with Step 2. In the meantime check out my newest Web site for the trucking industry (www.cdlofit.com) that lets you create your own page and share your photos and videos while staying in touch with family and friends. Best of all, it’s free.