Make progress towards your goals. Wayne and Lisa Firebaugh help you as they break down the other parts of the financial GPS. Learn about the danger of lifestyle creep, why cash flow is the second most important number in your financial plan, and how to think about building risks into your plan so you can avoid uncharted territory.

• Your financial GPS has to know your starting point and your destination to know what financial strategies should make up your route.
• Your position is a snapshot of your current financial condition. Accountants would refer to it as your balance sheet, everyone else would simply refer to it as your net worth.
• Your net worth is made up of your money and your assets that are both working for you and is one of the two most important numbers in your financial plan.
• We can’t afford to be stuck, which is why Gain is the first most important number. Gain is cash flow and momentum.
• Cash in less cash out equals the amount of Gain in the financial GPS. Your expenses include discretionary spending and taxes.
• Your income is less within your immediate control than your expenses. As our incomes increase, our lifestyles tend to increase as well, also known as Lifestyle Creep.
• Inflation is another major force eating away at the value of your money. It takes $1529 to buy the same stuff that $1000 would have purchased twenty years ago.
• Cash flow is what you add to your financial position each year. If Position is your current financial location, then Gain/cash flow is your progress towards your financial destination.
• Most advisors get paid based on your assets, not on your cash flow.
• Your financial GPS has to be even more reliable than your car’s GPS, which is why Security is the next component.
• The unplanned should be in the plan.
• You have to plan for unwelcome events and risks to your assets, reputation, and person.
• Ask yourself two things when it comes to risk: “What risks do I have in this stage of my life?” and “How would it affect my long term gain towards my goals were this risk to actually occur?”
• Identify the things that may take you into unverified financial territory in your financial life and get in touch with a fiduciary advisor to help you determine your plan.

To explore working with Wayne Firebaugh to fireproof your money, please call 855-WAYNE KNOWS or check out at fireproofyourmoney.com.