Financial Planning Focus Areas
This page provides an overview of the six different areas my financial planning services include. The categories below will help you understand the types of challenges I help clients address.
There is a LOT of information hidden within the expandable section headings below. I hope the content will serve as a valuable educational resource.
And if you're ready for a deep educational dive, check out my free Guide to Financial Planning for Therapists. It has a ton of great information and curated lists of resources to help you build a strong financial foundation. Click here to access!
Scroll on down below to begin your educational journey! ⬇️
But First... Life Planning ☕️
While each of the six topics explored below is important, equally important is that this work takes place within the framework of an overarching plan. And every plan needs a goal: what the plan hopes to create or accomplish.
In my practice, I use Life Planning to ensure your financial plan guides you toward the life you want. A careful exploration of the goals for your life is always where we begin. After that solid foundation is built, we then turn to the six different focus areas described below.
Because what's the point of doing any of the work if the work isn't creating the life you want?!
Click on Topic Headings Below for Additional Information
At many stages of your career, your private practice will be your largest financial asset. I don't say that because your could sell your business (although that is possible), but rather because your practice represents your future earning potential. The financial health of your private practice is the cornerstone of a healthy overall personal financial plan.
As you know (way better than I do), there is a LOT to think about here. That complexity, combined with your practice's importance to your financial health, makes it essential that your financial planner be able to offer you intelligent advice on the financial health of your practice.
When it comes to your private practice, my services are focused primarily (though not exclusively) on financial-related matters. I'll create and monitor a number of financial models and reports to facilitate this process.
Together, we'll help you feel confident about your approach to pricing, insurance, bookkeeping, budget & profitability, business entity choice, tax-management strategies and even HIPAA-compliant payment policies. I also especially love thinking through the financial potential of expanding your professional services beyond one-on-one therapy.
In addition to the finance & accounting stuff, I really enjoy helping you think through other business-y aspects of your practice. I love planning how to market therapy services in an effective and authentic way, and how to use online presence to accomplish that. I enjoy helping you evaluating EHR systems to see how that could potentially enhance your efficiency. It's also fun to consider what expanding your practice might look like, and what the human resource and financial implications of hiring additional clinicians might be.
My Favorite Project 🤓
One of the first projects I often complete is a five-year projected financial model for your private practice. This is probably my favorite thing to work on. Why? Well, I love building spreadsheet models. And also because I love the clarity and empowerment it will bring for you.
This modeling exercise provides a wide range of benefits. Here are the ones I've found often resonate:
- See clearly the overall financial picture of your practice, including average rate charged, expense levels and general trajectory.
- Highlight what types of changes could yield the largest financial improvements. The model provides a baseline against which we will monitor the financial progress of your practice. Where are things going well? Are there areas we could re-think to create greater financial abundance? The model will highlight what areas are most important.
- Evaluate work-life balance. Are you taking sufficient time away from the business to give yourself space to rest and replenish? Does your caseload allow sufficient time for self-care on a consistent basis? The model allows us to see clearly the financial implications of striking a different balance.
- Assess authentic fit with what you want as a professional. Are you pricing your services in a way that honors your value? Would you like to offer coursework, facilitate groups or share your gifts through other avenues beyond one-on-one therapy? The financial model helps us think through how you can explore these different paths to enhance your financial abundance.
Overview Video (not for the faint of heart)
If you want to see me dork out about how excited building this five-year model makes me, you can watch this video where I walk through the spreadsheet itself. 😬
Having healthy cash flow in your personal life is the foundation of long-term financial stability and abundance. By working to align spending with your personal values and life goals, you will reduce anxiety and step more fully into the life you feel called to live.
Personal cash flow work isn't about judging or shaming your spending habits. Rather, it is about seeing clearly where you spend your money. From there, we can evaluate what's working well and what could use a little improvement. Ultimately, cash flow work is about helping you decide what you want and then helping you navigate any required trade-offs.
Cash flow work is delivered through two different (yet related) projects: cash flow planning and long-term projections.
Cash Flow Planning 💸
Cash Flow Planning digs into the nitty gritty details of how you spend your hard-earned money. We will examine your personal spending and savings habits to make sure they support your overall life plan. This doesn't mean designing a rigid budget which constrains you. Rather, it means being open to finding the right set of tools and systems for you. I have plenty of different ideas for you to consider. There is no rigid, one-size-fits-all approach here.
The primary goal of the cash flow plan is to balance living an abundant life in the present, while prudently planning (and saving) for the future. If you would like to make changes, we will design a plan to better align spending with what you want. And then we will discuss how to make those changes feasible and enduring.
Long-Term Projections & Goals 🔭
Long-Term Projections examine both your current and future cashflows over the course of 15 years (and sometimes longer!).
The goal of this endeavor is to assess how your net worth will grow over time, and to make sure that you're saving prudently for your future life plans.
I'll estimate the cash flows required for future plans such as home purchases, children's educations, professional sabbaticals, or anything else you might have planned. I then marry this cashflow information with your savings and investments, to see how your overall net worth will grow over time.
Of course no one can predict the next 15+ years with accuracy. But this act of planning helps us ensure your actions today provide your future self a solid financial foundation.
The Taxman Cometh 🧟♂️
Enhancing the flow of cash in and out of your life also requires we make intelligent tax moves. A lot of tax strategy takes place within your private practice, but there are tax strategies to think through in your personal life as well. Keeping an eye on taxes and doing what we can to minimize them is a critical aspect of how I evaluate your personal cash flows.
And I really enjoy learning the tax code and its seemingly unending changes (that's normal, right?). Well... maybe not entirely, but my dorky tendencies will help you better manage your overall tax burden!
Ah, the Balance Sheet. 🥰 One of my favorite financial reports! What IS a balance sheet you ask? Your balance sheet summarizes two things: everything you OWN and everything you OWE.
Assets (What You Own) 😀
The "own" category is what we financial folks call your assets. Examples of assets you might own include your home, owned vehicles, and any savings & investments you have.
I'll monitor your assets on an ongoing basis and make sure you feel comfortable with how your assets are structured. How much of your net worth is invested in your primary residence? How does that feel for you? Are you comfortable with the risk and reward trade-offs of owning the mix of assets you do?
I'll also help you evaluate new asset acquisition: buying a new house or car, for example. Such a purchase of course requires an evaluation of how to finance it, which leads nicely into a discussion of the "what you owe."
Liabilities (What you Owe) ☹️
The "what you owe" category are your liabilities. Liabilities consist simply of whatever money you owe others. Common examples of liabilities include mortgage debt, auto loans, credit card debt and - oh yah - student loan debt.
Despite the ☹️ debt isn't inherently bad. And having debt certainly isn't the moral failing some personal finance "experts" make it out to be. Debt is simply an available tool. And like any tool 🔨we just want to make sure you use it in an intentional way.
I'll help you manage any debt you have appropriately. We'll also develop the right debt pay-off strategy for you. While credit card debt, mortgage debt and auto loans are important, they are fairly straight-forward to manage (at least as far as these things go). Student loan debt, on the other hand, is a whole different species of debt...
Student Loan Debt 🙈
Because student loan debt is so complicated to manage, I've take an extensive amount of continuing education through the CSLA Institute. This CE has provided me knowledge of the wide range of tools to help you eliminate your student loan debt once and for all. Normal debt repayment strategies often don't make sense with student loans. I have to think outside the traditional financial planner box.
There are a myriad of options available to you. And that's good because it means there is likely an option that will work great for you. But all those options are also a challenge because picking the right one is complex.
The most common options include private refinance, Income Driven Repayment (IDR) alternatives, Public Service Loan Forgiveness (PSLF) as well as other long-term forgiveness options available through the IDR Plans.
I'll carefully evaluate your student loan repayment and forgiveness options in the context of your overall financial life plan. And of course, I'll help implement whatever strategy we decide is best and most comfortable for you.
When you own your own small business, a wide range of retirement plan options become available to you. You have a TON of great ways to defer income tax and accumulate wealth for your golden years. The down side is that this multitude of options can feel overwhelming and paralyzing.
That's where I come in! I'll help you sort through the different retirement plan options and implement the plan that is best for both your practice and your personal needs. And once established, we'll use a prudent investment philosophy to help you move toward financial independence.
Ah, investments. One of my favorites subjects! And SUCH a complicated subject.
If you're new to investing, a lot of the information in this section might fall into the TL;DR category - and that's totally fine. The bottom line is that I'll manage your investments in a smart, cost-sensitive and tax-efficient manner. And I'll take plenty of time to educate you along the way.
Investing done well doesn't need to be complicated. The truth is a good investing plan should be (fairly) simple. But there is an INSANE amount of noise out there that would have you believe otherwise. And by noise I mean both bad takes as well as self-serving if not fraudulent advice. I'll help you tune out that noise and stay focused on the best investment strategy for you.
Investment Management Services
Comprehensive investment management is included as part of my ongoing financial life planning services. I primarily use Dimensional Fund Advisors (DFA) funds. I believe DFA investments offer a small, but meaningful, improvement relative to other (better known) diversified, low-cost options (such as Vanguard funds). I invest in DFA funds through my own financial planner. DFA funds may only be accessed through working with an investment professional.
I believe in buying and holding diversified, low-cost and tax-efficient investments for medium to long-term goals. As such, my investment recommendations will be a mix of diversified equity and bond mutual funds (or ETFs). Often, I also suggest diversified real estate holdings (also through mutual funds or ETFs). Alternative assets like cyptocurrency (e.g. Bitcoin) might also make sense for a (limited) portion of your portfolio.
What my recommendations won't contain are specific companies in which to invest or any "hot" stock tips. I don't believe there is any evidence that picking specific stocks like that provides good investment returns. Sure, you could have a good run, but picking individual stocks to consistently outperform the return of the overall market is essentially impossible. And consistency is critical when investing for medium and long-term goals.
In my opinion, it is simply not possible to time the market or outperform the market over the long-term. If someone tells you they have an investment that is in any way guaranteed to pay off, they are either lying or delusional. If you can't tell, I have some opinions on this subject. 😬
Managing the risk to which you (and your loved ones) are exposed is an essential element of a solid financial plan. When it comes to risk management for therapists there are three categories: insurable risk, business risk & credit risk. I'll help you intelligently and cost effectively manage all three.
1. Insurable Risk
Here we are talking about risks in your personal life (and risks in the lives of your loved ones). These are the risks addressed by the seven primary flavors of insurance. Those seven are: health insurance, auto insurance, home owner's (or renter's) insurance, umbrella liability insurance, disability insurance, life insurance and long-term care insurance.
I'll help you evaluate the costs and benefits of each these policies and determine which are right for you. We'll also remind you and help you think through the end-of-year open enrollment season for health insurance.
And because I never earn a fee when you purchase insurance, you can rest assured that my recommendations are unbiased. I recommend insurance when I truly believe it is right for you. (Not because I'll get a fat commission check.) There are plenty of insurance agents out there that only earn money when you buy a policy. This leads to some, shall we say, questionable recommendations.
Life Insurance Rant 😤
One thing insurance agents seem to love to do is sell whole life insurance policies. This despite the fact that 99.999% of the time all you need is a simple term life insurance product. And term life insurance is cheap. Whole life policies are expensive - often unbelievably so. You can guess which type of policy will earn the selling agent the biggest commission.
Despite what many sales agents will tell you, insurance polices are rarely (if ever) good investments or appropriate ways to save for retirement. Unless you're solving a thorny business transfer or estate tax planning issue, you are almost always better off with term insurance. Sure, there could be that 0.001% of the time where whole life is better than term life. But I'll believe that when I see it. Rant over.
2. Business (e.g. Private Practice) Risk
As a small business owner, you are also exposed to business risks. You have two primary tools available to manage this risk: insurance and business entity. I will help guide you through evaluation and (if appropriate) implementation of both.
Unless your practice owns assets (such as a building or vehicles), the appropriate insurance policies usually boil down to malpractice and general liability. Commercial renter's insurance could also be something to consider.
Business entity (e.g. LLC or Professional Corporation) can be an important tool to shield your personal assets from business liability. But keep in mind that no business entity will ever shield you from professional liability (e.g. any activity you take as a licensed mental health professional). That's why you ALWAYS need to maintain your malpractice insurance.
Certain business entities also offer tax benefits which I'll help you evaluate.
One important note here. Only a qualified and properly licensed attorney can offer you legal advice, and business entity matters fall into that category. Turning Point does not employ a licensed attorney and does not offer legal advice. I will help you think through general pros and cons of different approaches, but if you need specific recommendations we will find you a qualified attorney.
3. Credit Risk 💳
Credit risk is the risk of identity theft and the risk that something funky is happening with your credit file. The risk of identity theft isn't necessarily huge, but the downside is awful.
I will help you manage your credit in a way that supports a healthy credit score. And a good credit score is important such that you can access borrowing when you need it.
Credit risk is a pretty easy risk to manage, and yet it's something many of us put off or ignore. It is admittedly one of the many small annoyances of modern life. I'll walk you through the simple steps to make sure your credit files are tip top and accurate at all times.
And if you need to boost that credit score a few ticks, I'll help guide you through improving your rating. There is no quick fix for a low credit score, so please don't fall victim to the many scams requesting a "reasonable" payment for an alleged quick resolution to your credit woes. Slow and steady wins the race here.
Estate planning. Wow, does that sound like something just for rich people. And, yes, it is for rich people.
AND it's also something for people who aren't rich. And planning for incapacity - while admittedly uncomfortable to think about - is important for all of us.
I think of Incapacity & Estate Planning as a practice of loving kindness. By planning for situations where you can't show up in the same way you do today, you extend loving kindness to your loved ones, your clients and your future self.
I'll help you determine what estate planning & incapacity planning moves are right for you. This planning exercise has three components: personal incapacity, professional incapacity & estate planning.
Personal Incapacity Planning 🤕
Personal Incapacity planning is put in place to handle your personal affairs in the event you suffer some form of incapacitation, such as illness or hospitalization. In such an event, we want your personal administrative affairs to be well organized and for your loved ones to know how to handle things.
Of course I would be available to help your loved ones navigate whatever you need them to do. And there are also some great software tools to help you both stay organized and clearly communicate your wishes.
We also want to make sure your loved ones have the legal power to manage your personal affairs. Therefore, it almost always makes sense to put in place a Durable Power of Attorney. This legal document grants a surrogate the legal authority to manage your affairs on your behalf.
We'll also likely want to put in place legal documents to cover your medical care. These three documents are a Medical Power of Attorney, an Advanced Directive and a HIPAA Authorization. The exact legal documents vary by state, but each state allows for similar provisions.
The medical power of attorney provisions empower someone you trust to make medical decisions on your behalf. Advance directive provisions are a direct instruction from you to your healthcare providers in written form. Advance directive provisions cover a limited set of circumstances, such as removal of life support under. Finally, the HIPAA authorization form allows designated persons to gain access to your Protected Health Information.
Professional Incapacity Planning 💼
Professional incapacity planning protects your clients and business partners in the event you suffer any type of sudden incapacitation. There are two elements: a professional will and a business continuity plan. A business continuity plan includes an emergency response team, which you may have seen abbreviated ERT.
I'll help you put a professional will in place. A profession will memorializes specific legal aspects of how you would like your practice to be handled, including who is authorized to access sensitive client information.
While a great start, a professional will alone is often insufficient. Your professional will should be supplemented with a business (or practice) continuity plan. This plan spells out your business processes, location of key files and information, how you would like to notify clients as well as the emergency team responsible for carrying these plans out.
Having completed my own continuity planning for Turning Point, I can tell you that this is no small amount of work. The good news is that it doesn't need to be done all at once. Even a very minimal continuity plan is MUCH better than none at all. I will help you think though how to implement a continuity plan with guidance, worksheets and (if you would like it) accountability.
Estate Planning 🏰
Estate planning refers to the plan put in place to ensure your assets are transferred after your death and in accordance with your wishes. The tools available include: property titling, beneficiary designations and trust & will documents. I'll help you think through what methods might make sense. If you require legal advice (or formal trust or will documents are required), I'll help you select a qualified estate planning attorney familiar with the laws of your state. I will also help facilitate your work with that attorney.