What is Personal Financial Planning?
Personal financial planning is simply expert guidance on personal financial decisions in order to satisfy life needs and goals. It may also include portfolio decisions and fulfillment of portfolio needs through various products or choices.
Why do I Need Personal Financial Planning?
Financial planning allows you to organize your finances in such a way as to maximize returns on investments, reduce tax liability, achieve appropriate risk management, and ultimately obtain financial peace of mind.
But Can't I Just Do It Alone?
Perhaps, but will you? Most business people and professionals are finding it increasingly difficult to plan adequately for their personal financial growth and security. Among the most common reasons for their frustrations are:
- Insufficient time
- Too great a number of investment possibilities
- Tax laws change to frequently to keep up
- Complexities in employee compensation and benefits
What is Generally Included in a Financial Plan?
A plan may range from 50 to 150 pages, based on the complexity of circumstances and the degree of explanation and detail:
- Cash Flow and Budgeting Analysis
- Capital Management (debt and investment portfolios)
- Estate Planning Analysis
- Income Tax Projections and Planning
- Retirement Needs Analysis
- Insurance Needs Assessment
- Future Educational Funding Needs
- Employee Benefit and Holdings Analysis
- Business Analysis (if applicable)
What Role Do I Take in the Planning Process?
You and your spouse provide information about your personal and family goals, attitudes about taxes, indebtedness, investment risk and security. Your financial plan will take this information into consideration. You will also be called upon to update this data at least once each year.
Are Fees for Financial Plans Tax Deductible?
Typically yes. IRS Section 212 lays out the specifics as to what aspects of your investments and tax planning are deductible (and you planner should be able to assist in this).
How Do You Measure the Worth of Financial Planning?
After your situation has been sufficiently analyzed and recommendations have been made, you will be able to compare the cost of the plan to the savings that the plan projects for the future. In the long-term the savings should far exceed the cost of the plan preparation.
Will Personal Financial Planning Make Me Rich?
Unfortunately, there are no get-rich-quick schemes that really work. All the more reason for personal financial planning; it can help you keep more of what you earn and keep your savings working harder. It does this by:
- Increasing the productivity of assets
- Providing capital growth and security for your family
- Broadening asset structure to reduce risks
- Provides introduction to a broader spectrum of investment opportunities
- Increased income through tax planning
- Investment alternatives are provides closer inspection
- Minimizes the effect of disability, forced retirement, and death - 15790
Personal financial planning is simply expert guidance on personal financial decisions in order to satisfy life needs and goals. It may also include portfolio decisions and fulfillment of portfolio needs through various products or choices.
Why do I Need Personal Financial Planning?
Financial planning allows you to organize your finances in such a way as to maximize returns on investments, reduce tax liability, achieve appropriate risk management, and ultimately obtain financial peace of mind.
But Can't I Just Do It Alone?
Perhaps, but will you? Most business people and professionals are finding it increasingly difficult to plan adequately for their personal financial growth and security. Among the most common reasons for their frustrations are:
- Insufficient time
- Too great a number of investment possibilities
- Tax laws change to frequently to keep up
- Complexities in employee compensation and benefits
What is Generally Included in a Financial Plan?
A plan may range from 50 to 150 pages, based on the complexity of circumstances and the degree of explanation and detail:
- Cash Flow and Budgeting Analysis
- Capital Management (debt and investment portfolios)
- Estate Planning Analysis
- Income Tax Projections and Planning
- Retirement Needs Analysis
- Insurance Needs Assessment
- Future Educational Funding Needs
- Employee Benefit and Holdings Analysis
- Business Analysis (if applicable)
What Role Do I Take in the Planning Process?
You and your spouse provide information about your personal and family goals, attitudes about taxes, indebtedness, investment risk and security. Your financial plan will take this information into consideration. You will also be called upon to update this data at least once each year.
Are Fees for Financial Plans Tax Deductible?
Typically yes. IRS Section 212 lays out the specifics as to what aspects of your investments and tax planning are deductible (and you planner should be able to assist in this).
How Do You Measure the Worth of Financial Planning?
After your situation has been sufficiently analyzed and recommendations have been made, you will be able to compare the cost of the plan to the savings that the plan projects for the future. In the long-term the savings should far exceed the cost of the plan preparation.
Will Personal Financial Planning Make Me Rich?
Unfortunately, there are no get-rich-quick schemes that really work. All the more reason for personal financial planning; it can help you keep more of what you earn and keep your savings working harder. It does this by:
- Increasing the productivity of assets
- Providing capital growth and security for your family
- Broadening asset structure to reduce risks
- Provides introduction to a broader spectrum of investment opportunities
- Increased income through tax planning
- Investment alternatives are provides closer inspection
- Minimizes the effect of disability, forced retirement, and death - 15790
About the Author:
Hank Brock is President of Brock and Associates, LLC, a St George based financial planning firm specializing in asset protection and generational wealth management. Visit us online for further information on choosing a financial planner and other financial planning topics.