ABOUT THE
PLANNING PROCESS
FAMILIARIZE YOURSELF WITH THE AREAS OF FINANCIAL
PLANNING
There are many common
misconceptions about financial planning. In the last few years, the
words “financial planning” has become the buzz word in the media and
used by everyone from tax prepares to insurance salespeople to brokers
to describe their services. A complete financial plan should cover six
key areas of your financial life and each area should reflect your
personal goals:
1. Financial Position –
A sound financial plan assesses where you stand today, what you want to
achieve and helps you determine how to reach your goals.
2.
Protection Planning – Protecting your self against the unexpected
is a vital element in financial planning. Illness, accident, death or
disability can be disastrous. These events can result in huge expenses
or loss of working income. Protecting you and your family from the
consequences of those events is a vital part of successful financial
planning. Protection planning can also include ways of protecting
against loss of personal property, or your liability for loss incurred
by others.
3. Investment Planning – Investment planning is
probably one of the most common known elements of financial planning.
The objective of investment planning is to build your assets and
investments to help you reach your goals. Investment planning is
critical to financial planning because your investment strategy helps
determine how, when and even if you will be able to achieve your goals.
Investment planning helps your choose investments that are appropriate
for your investment goals, your tolerance for risk, your time horizons
and your overall financial plan.
4. Tax Planning – Tax
planning can be a powerful tool for building wealth. It may provide
strategies to lower the tax on income from your job or, at the least,
defer payment of part of your tax. If the savings are invested in a
retirement plan, such as an IRA, the potential for growth can be
significant. Tax Planning can be used to select investments that produce
income taxed at a lower rate, such as income from the sale of securities
or real estate held for longer periods of time.
5. Retirement
Planning – Our changing society makes retirement planning more
important than ever. Longer life expectancies, reduce pension plans,
corporate “rightsizing,” the trend toward multiple job and career
changes, and now rising health care costs all make planning for
retirement more critical now more than ever before. So regardless of
your age, where you work, or your life situation, you should start
planning now for your retirement.
- What is Financial Planning?
- Why is Financial Planning Important?
- Who needs a Financial Plan?
Investment Inquiry
Securities through Veritrust
Financial Services, Member NASD & SIPC
McGlothlin Group, Redlands,
CA
