Module 2: How much will I need?

When you're no longer running your business, knowing what you want to do with your time and resources is the basis for all your goals and plans.

Key Points

• Your future lifestyle drives the budget you will need in the future.
• Develop LIFE goals for investing your Labor, Influence, Finances, and Experience.
• Your business can fund your future.
• A Master Plan incorporates your business and personal goals.

Download the workbook for Module 2

You can use the workbook to take notes, and it also includes some assignments.

What do you want to do?

Watch this video to consider a holistic perspective for your future.

Key Takeaways

• Your future budget needs to cover your desired lifestyle, the things you want to do, and a possible prize.
• Investing your Labor, Influence, Finances, and Experience can yield a fulfilling new phase in your life after exiting your business.
• Your business can fill the gap between your future financial needs and your current resources.
• Your Master Plan pulls together your goals and plans for various periods in your life; the now, the post-business phase, and even after you pass.

Next Steps

• If you haven't yet, please download the workbook for Module 2.
• Complete the assignment in your workbook for lesson 1.
• Take a moment to reflect on your successes so far, and the not-so-distant future rewards you are envisioning.
• Move to the next lesson to consider opportunities for you to leave a legacy personally, and with your business.

Many business owners have spent decades building a successful business. Now is your opportunity to share your success with others in new ways.

Key Points

• You can expand your impact by engaging others in your future endeavors.
• There are planned giving options that allow you to collect income and/or specify who receives the assets you donate.
• Giving during your lifetime can positively influence your family's philanthropic spirit.
• Only written estate plans are considered when your assets are distributed after you pass.

If you haven't yet: Download the workbook for Module 2

What do you want to leave?

Watch this video to see many ways you can leave a legacy.

Key Takeaways

• As you consider what you want to do in the future, think about who you can include.
• You can give income and/or assets now and after you pass.
• Including your family in some of your gifting instills a value of giving.
• Be sure your written estate plans are current; otherwise, your heirs may be surprised.

Next Steps

• Congratulations! We hope you're seeing the many ways you can make a difference in your world.
• Please move to the next lesson for an overview of how your future financial needs are calculated.

The most appropriate answer is it depends… on how long you live, how fast you spend your money, and how much you have to start with.

Key Points

• Future income sources must be considered as well as expenses.
• Cash flow forecasts are based on assumptions about your lifespan, inflation, and the return on your investments.
• One-time inflows and outflows are also considered, such as new homes and the sale of your business.
• Financial planners have software that calculates the cash surplus or deficit throughout your lifetime.
• A Monte Carlo analysis predicts the likelihood that your money will last.

How long will the money last?

Watch this video to see how these variables are used to calculate how much money you'll need to meet your goals and make your plans a reality.

Key Takeaways

• Income sources like retirement plans, social security, and return on your portfolio are used in the calculation of your cash needs.
• You need to estimate how long you expect to live, and how inflation and investments will fare during your lifetime.
• Big-ticket items like selling your business and buying a new home are considered in the calculations.
• Computerized software has the capacity to calculate cash flow every year based on all these variables.
• The confidence rating from the Monte Carlo simulation lets you know if you'll need to cut back on your spending dreams, increase your income, or build the value of your business.

Next Steps

• Complete the assignment in your workbook for lesson 3.
• Whew, that was another math-brain-cell burner! The good news is you've started to understand the numbers necessary to start your financial future calculations.
• Move to the next lesson for a brief recap of this module. We will reinforce the overall point that the value of your business can fill the gap to cover your future financial needs.

In this module, we have focused on the many variables involved in calculating your future financial needs.

Highlights From This Module

• Knowing what you want to do in the future drives your financial needs and your life satisfaction.
• Your LIFE (Life, Influence, Finances, Experience) and legacy goals have a significant impact on your finances.
• Any of your wishes that are not legally recorded won't happen.
• A detailed cash flow analysis relies on assumptions about your life, what you plan to spend, and your income sources.
• Using the Monte Carlo analysis, you can predict the likelihood that you'll have enough money to do what you have envisioned.
• You can build the value of your business to supplement your future income and make your dreams a reality.

Your business can do this!

Watch this summary of Module 2.

Key Takeaways

• Your goals and plans for the future determine your financial needs and your life satisfaction.
• Your future financial plan needs to include your LIFE and legacy goals to make them a reality.
• Record all of your wishes in a legally binding manner - or they will not happen.
• Estimating how long you'll live, how much money you'll spend, and your income sources are key to forecasting your cash flow.
• You can have confidence in your financial projections when the Monte Carlo analysis runs 1,000 scenarios and most of them predict success.
• If at first, it doesn't look like you'll have enough, you can build the value of your business so that your future income can support your dreams.

Next Steps

• Complete the assignment for lesson 4 in your Module 2 workbook.
• Congratulate yourself for completing the first third of this course. Yay! You're now ready to discover the many ways you can protect, build, and harvest the value of your business.
• Meet with the advisor/expert who recommended this series or your roundtable. Please bring your questions and ideas for discussion.
• Get ready to work through the next module to know how to start building the value of your business.