Mark Kohler, a CPA-attorney, walks through building a 10-year financial plan by first writing down your ideal scene in detail, then using the SMART framework to turn it into measurable goals. Work backward from that vision into 5-, 3-, and 1-year milestones, then into this year's concrete tasks. Share it with a trusted advisory board for accountability.
Chapters
Hi, my name is Mark Kohler and I'm a CPA attorney, author, and truly a business consultant. And with my team of Amazing attorneys and CPAs, we help thousands of clients around the country build their American dream, build their business plan, their model, their structure, and how they can better succeed financially. Well, a principle we talk about a lot and a strategy that's affected my life profoundly is building a ten year plan. A ten year plan is an important piece of building your American dream. Now what I love about a 10 year plan and what's unique, very, very different than goal setting is it really illuminates that light at the end of the tunnel. It gives us a roadmap with measurable steps we can take and we can see where we're really headed in a more realistic and practical way. So where do we start? Well, the ten year plan begins with an ideal scene. I want you to write down, pen to paper, what your future financially looks like 10 years from now. What's realistic? Write down what you see or envision in your bank account. How many rental properties do you have, your retirement fund you're building, what does it all look like? And write it down. Now to really complete this, you've got to find an inspiring spot. Where's that place where you're uninterrupted and you can really meditate and think about that future? Is it by the ocean? Is it looking at the mountains? Is it in a park? Is it in that favorite place in the house where you can find solace? Think profoundly about what that future is going to look like. Now, write it down. And that's your ideal scene. I also like to use the acronym smart S M A R T, sometimes referenced in goal setting in popular self help culture. But I think it really helps. When writing down your ideal scene now, S stands for specific. I want you to be very clear about what your finances look like. Make sure you're clearly stating in detail all the areas of your finances that you want to have impacted or affected with your plan. M stands for measurable. When you're being specific, I want you to put real numbers, dollar amounts, or quantify rental property or assets or raw land or whatever the case may be. Put numbers to it. A stands for attainable. Let's be realistic. I'm not going to probably be a billionaire in 10 years, but what could I obtain with reallocation of my resources and using my time more effectively and getting the education I need and finding maybe partners or money that I didn't think of before to help me get there. Is it really attainable? Let's be realistic. R stands for relevant. Are these financial goals going to fit into my overall 10 year plan? Maybe where I want to live, my relationships, my health and goals that I may be setting for myself and other aspects of my life. I have to make sure they all interconnect and think about some of those broader issues so that my financial goals are relevant to my overall personal plan. T stands for time. Specifically 10 years from now on a specific date of where we want to be with these finances. Now the next important piece in this process is we're going to work backwards. We're going to look at this plan and say, okay, if I want to be here financially in 10 years, where do I need to be in five? Where do I need to be in three or even one year from now? I can work backwards and have attainable clear steps of what I need to do to get there. For example, rental property. If I say I want 10 rental properties in 10 years, well, maybe I should have five properties in the next five years, three properties in the next three years, one in the next year. Can I set that goal and make it happen? Now that we're thinking of moving backwards from our 10 year plan so that we can see what we need to do tomorrow, it begins the process of building our annual strategic plan. And here's what it looks like. I love to use the whiteboard here. So we've written down this beautiful ideal scene. What are our finances look like 10 years into the future? And we can start to work backwards, right? We can say okay, if I'm going to be here in 10, where do I need to be in five years? And then, well, where should I be in three years? And we can probably extrapolate backwards and say, okay, if I want to be here in three, where do I need to be in the next year? Well this allows us to draft that strategic plan. And the strategic plan is really the nuts and bolts to do list of what I'm going to do in the next months, weeks, maybe even days this year to keep me on my journey, on my path to get to this point. And I carry around that strap plan with me where everywhere I go, I want to have that with me on a plane, take it home at night, having it next to my nightstand. I, I want to be able to make adjustments to my strap plan as life comes at you because it's going to be modifiable. It's your plan, it's okay if you change it. We still know generally where we want to be, but we can't turn our life upside down to get there. We're going to have this annual strategic plan, but something we're working towards, a place we're headed now. A couple cautionary points. The first one is this plan may require you to take one step backwards before you take three steps forward. For example, I had this couple that came to my office and had their 10 year plan all written out. They were excited to show me, I was anxious to see it. And as I looked at it, they had a pretty lofty goal for 10 years, which is fine. But they almost just mechanically divided it by 10 and say, well, here's where we need to be next year. I thought, I don't know if you're ready to be there in one year or even 18 months from now. We've got to do some house cleaning, we need to get out of some debt, we need some reserves. We've got to do some things to build a foundation before you start on this journey. And let's think about that as an analogy. If I'm going to take a 10 mile hike, shouldn't I pack a bag, get some water, make sure I've got the right shoes on? Maybe I take an hour or two to prepare for this journey or hike before I just run out the door. Or else I'm going to clearly fail on my plan if I don't prepare properly. So taking some time the first year to not even obtain where we think we should be on an annual basis could really be a huge step forward. In 18 months to two years from now, then we can really put the pedal to the metal. We can turn on the gas two or three years from now and catch up to where we need to be in five years. Because I built the foundation first and that's okay. I don't want you to feel like you're doing moving backwards. This ten year plan is terrible because I'm not making progress. Oh no, no, you're making progress building the foundation before you throw up the sticks and bricks above the ground. Because we want that building to last. We want it to make sense and to be structurally sound. So it's okay if we step back a little bit as part of this 10 year plan to really get on the fast lane and get on the freeway to move along the path. Now the most important and final step of this process is sharing it, right? Sounds scary. You got to share this plan with people, really. I know, but that's what makes it come alive and creates accountability because you're going to share this and now someone's going to ask you about it on a regular basis. And you're going to feel like you need to make progress not only for yourself, but for those that you've shared it with to show them that you're serious and you're going to be legitimate about this plan. Now who do you share it with? Well, for years I've talked about having that board of directors or board of advisors for your corporation or llc. Now, if you don't have an entity yet and your business plans are still out there in the future, that's okay. You can still build a board of advisors. You're going to choose three, four, five people that could be from around the country, around the world. They don't have to be down the street, young or old, business owner or not, male or female, family or not family, but three to five people that believe in you. They're not going to tear you down. They're going to encourage you, but give you real truthful advice, but not again, tear you down, make you feel bad about yourself and your plan. These are people that are going to be cheerleaders for you no matter how you modify your plan. Find these people. Maybe you're buying them dinner or lunch or even paying them per hour, I don't know. But people that you can count on, lean on and Discuss with your 10 year plan as you move forward. In summary, remember, it's a journey. I've used that word a few times during this presentation. It's not a race. This is your plan. Don't feel like you've got to compete with someone else in the family, in the neighborhood, in the church or in the club, wherever you socialize. Don't worry about how fast they're moving or what they're doing or what they're trying to accomplish. This is your plan and you need to move at your pace. That makes sense for you. Everybody is different and that's okay. But we still need a plan. We want to be making progress. And even if that progress is just a little bit every day, week or month, at least we're moving forward. So don't give up. Write down that plan and carry it with you everywhere you go to help motivate you to get there someday.
