What is Personal Financial Planning?
Personal financial planning is guidance by a licensed financial professional on the financial decisions faced by individuals. It includes portfolio allocations, future planning decisions, goal setting, and exploration of different investment vehicles.
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 Accomplish That Myself?
That?s possible, but will you actually do it? Most have found it to be increasing difficult to adequately plan for their financial growth and security. Their most common roadblocks to personal planning have been:
- No time
- The wide variety of today?s investment opportunities
- Tax laws change to frequently to keep up
- Untangling employee compensation and benefits
What is Typically Included in a Financial Plan?
The length of the plan is based on the complexity and specifics of each individual situation. The typical plan can be anywhere from 10 pages to 150 pages and includes:
- Cash Flow Analysis
- Debt Management and Investment Portfolio Assessment
- Liquidity Analysis (Estate and Retirement)
- Tax and Planning Projections
- Retirement Needs Analysis
- Insurance Evaluation
- Future Educational Funding Needs
- Employee Benefit Analysis
- Business Analysis (if applicable)
What Role Do I Take in the Planning Process?
Your role in the planning process is to provide as clear and concise information to the planner as you can. They should clearly understand your goals, dreams, attitudes, and positions. Your planner may meet with you annually to update this information.
Are Any of the Financial Planning Fees 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 Can I Measure the Worth of Financial Planning?
After your situation has been analyzed and recommendations made, you will be able to compare clearly your present financial condition with what is projected for the future. The long-range benefits should far outweigh the costs.
Will Personal Financial Planning Make Me Rich?
Regrettably, get-rich-quick schemes generally don't work. This makes personal financial planning all the more important. Proper planning will help you keep more of what you earn and assist in helping your money work harder for you. It will do this by:
- Increasing the productivity of assets
- Provides growth and security for your family
- Broadening asset structure to reduce risks
- Provides introduction to a broader spectrum of investment opportunities
- Increased tax savings
- Investment alternatives are provides closer inspection
- Minimizes the negative effects of disability, early retirement, and death
Personal financial planning is guidance by a licensed financial professional on the financial decisions faced by individuals. It includes portfolio allocations, future planning decisions, goal setting, and exploration of different investment vehicles.
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 Accomplish That Myself?
That?s possible, but will you actually do it? Most have found it to be increasing difficult to adequately plan for their financial growth and security. Their most common roadblocks to personal planning have been:
- No time
- The wide variety of today?s investment opportunities
- Tax laws change to frequently to keep up
- Untangling employee compensation and benefits
What is Typically Included in a Financial Plan?
The length of the plan is based on the complexity and specifics of each individual situation. The typical plan can be anywhere from 10 pages to 150 pages and includes:
- Cash Flow Analysis
- Debt Management and Investment Portfolio Assessment
- Liquidity Analysis (Estate and Retirement)
- Tax and Planning Projections
- Retirement Needs Analysis
- Insurance Evaluation
- Future Educational Funding Needs
- Employee Benefit Analysis
- Business Analysis (if applicable)
What Role Do I Take in the Planning Process?
Your role in the planning process is to provide as clear and concise information to the planner as you can. They should clearly understand your goals, dreams, attitudes, and positions. Your planner may meet with you annually to update this information.
Are Any of the Financial Planning Fees 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 Can I Measure the Worth of Financial Planning?
After your situation has been analyzed and recommendations made, you will be able to compare clearly your present financial condition with what is projected for the future. The long-range benefits should far outweigh the costs.
Will Personal Financial Planning Make Me Rich?
Regrettably, get-rich-quick schemes generally don't work. This makes personal financial planning all the more important. Proper planning will help you keep more of what you earn and assist in helping your money work harder for you. It will do this by:
- Increasing the productivity of assets
- Provides growth and security for your family
- Broadening asset structure to reduce risks
- Provides introduction to a broader spectrum of investment opportunities
- Increased tax savings
- Investment alternatives are provides closer inspection
- Minimizes the negative effects of disability, early retirement, and death
About the Author:
Hank Brock is President of Brock and Associates, a St George Utah financial planning firm specializing in retirement, estate, tax, and business planning. Visit us online for further information on choosing a financial planner and other financial planning topics.
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