The Following Story is brought to you by financial advisor

What is Financial Planning?

Financial Planning has become the trendy buzz phrase for proactively taking care of your finances. It goes far beyond the dreaded “B Word” (Budgeting) and can make all the difference between reaching your goals and settling for whatever your financial life throws your way.

What Should a Complete Financial Plan Cover?

A complete financial plan should cover six areas, including:

1. Current Financial Situation – This area should cover where you stand in terms of assets, liabilities, income, and expenses. It serves as a snapshot of where you are and a quick barometer for your checkups. Important figures here include your cash flow (income minus expenses) and net worth (the value of what you own minus what you still owe).

2. Risk Management – This section analyzes what happens when things don't go as planned and determines your insurance needs, such as life insurance, disability insurance, health insurance, long term care (nursing home) insurance, and property and casualty insurance.

3. Accumulation – Strategies for saving and investing for future goals such as college education costs for a child or the dream retirement home or boat. You need to know how much you need to save at an expected rate of return to reach your goal(s).

4. Tax Strategies – This section looks at your projected tax liability given your current income and deductions to determine if there are ways for you to minimize your tax liability.

5. Retirement Planning – Here you will determine how much money you need to save by your retirement date to retire in the manner in which you choose.

6. Estate Planning – Proper planning is this area will make sure your assets (estate) are transferred properly to your heirs, with minimal taxes and probate (court) costs. Other areas covered may include ways of giving money and assets to a favorite charity.

Other Considerations for Your Financial Plan

The difference between a dream and a goal is goals have specific times and amounts attached to them. The more specific you make your goals and the better you convey that vision with your financial advisor, the easier it will be to create a financial plan that you can follow and stick with. Your plan should be a written document that allows you to pull it out and review it from time to time and to use as an ongoing tool to turn those goals (and dreams) into reality.

Ask around and start interviewing financial advisors to help you get a plan and stay on track!

To Your Success!

More info here: financial advisor

Blog Powered by www.bloglines.co.za and My Sales Team