by Hank Brock
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:
- Lack of time
- Too many different investment opportunities
- The complexity of ever-changing tax laws
- Untangling employee compensation and benefits
In General, What is Included in a Financial Plan?
The length of the plan is based on the complexity and details required for each individual’s circumstances. The typical plan can range from anywhere between 15 to 200 pages and includes:
- Cash Flow Budgeting Analysis
- Capital Management (debt and investment portfolios)
- Liquidity Analysis (Estate and Retirement)
- Income Tax Projections
- Retirement (forecasting benefits, costs and options)
- Insurance Evaluation
- Educational Funding Requirements
- Employee Benefit and Holdings Analysis
- Business Analysis (if applicable)
Where Do I Fit Into the Planning Process?
You and your spouse obviously have a crucial role in the planning process. The plan is custom built to your specific circumstances, and as such should include specific aspects of your life. You should make sure that your planner understands you attitudes, goals, risk tolerance, and security needs. The more the planner understands you, the more customized your plan can become.
Are Fees for Financial Plans Tax Deductible?
Yes. Expenses for investment and tax planning are deductible as itemized expenses, subject to limitations - IRS Section 212.
How Can I Measure the Worth of Financial Planning?
Once the planner has assessed your situation and made recommendations, you should be able to compare the projections with the cost of the analysis. Your planner should have presented data that more than paid for the expense of the plan.
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:
- Productivity of assets are increased
- Providing capital growth and security for your family
- Broadening asset structure to reduce risks
- Providing participation in new investment opportunities
- Increased tax savings
- Selection of investment strategies are more closely analyzed
- Minimizes the negative effects of disability, early retirement, and death
by Korrupshun
Before you buy any shares of a company the first thing to think about is if the price will go up or down in the foreseeable future. Failing to consider this one crucial point, can result in a loss of capital.
After thinking about the first crucial piece of information, you should always keep in mind whether the stock is cheap or not. If you think buying undervalued stocks means learning how to buy penny stocks then you may end up losing money no matter what. Essentially, knowing how to pick stocks like the pros is akin to investing like you have done it your whole life.
What are cheap stocks then? Buying cheap stocks means purchasing them when they are trading below face value. Finding these cheap stocks is what makes the pros so wealthy.
How do you buy a stock that is cheap? The number one thing to look for is a sector that is not performing like it should or will be performing well soon . Very that the PE multiple of your stock is favorable when compared to it’s competitors PE multiple. If the stock price looks like it will go higher and the competitor comparison is good, then you just got lucky and found a cheap stock. If you really believe the stock is under priced then you should think about buying it.
Does this mean you should not learn how to start trading mutual funds? Don’t be foolish. If you refuse to learn other ways of investing then you will probably end up broke. Learning how to invest in things like mutual funds will help. You might regret not taking the opportunity to learn it. Mutual funds should be a perfect way to make your investments grow over a very long time. You would not want to be one of the destitute and regretful would you?
by Mijn adviseur
Whenever you read a general article about mortgages the term foreclosure is oftentimes accompanying it. This recession in the U.S. today has sacrificed the jobs of millions and caused unemployment to skyrocket. Millions are at risk of losing their homes right under their feet. The news doesn’t provide much comfort too. What can we do as Americans in this stressful declining mortgage market?
Webster states that mortgage is the pledging of your property to a creditor as security of a debt.Which in simple terms means buying your house through a bank via a loan, and if you default in payments the bank has the right to seize back the property. With having to pay back to the bank, there are legal litigations that have to be filed. The litigations state that if you default for a consecutive period of time the bank can then take ownership over your property. There are a few things we can do to cease the foreclosure on our own property. We can choose to refinance, apply for a reverse mortgage, or a loan modification.
Refinancing your mortgage means paying off your existing mortgage and signing a loan to get a new mortgage. Many people choose to refinance their mortgage in hopes of getting a lower percentage of interest added to their current amount. For instance, say your mortgage was $600.00 dollars and you were paying 12% in interest your payment would actually be $672.00 dollars per month. With doing a refinance on your mortgage you could drop that percentage of interest lower, say to 3% which would leave you paying $618.00 per month. Refinancing is supposed to drop the rate of interest you pay on your property yearly and therefore reduce your monthly mortgage rate.
Are you at least 62 years old, own your home, and have a low mortgage balance remaining on the home you reside in? Reverse mortgage will probably be the best avenue you can take. Reverse mortgages allow homeowners to change equity in their homes over to cash and pay off their mortgage all together. This home loan never has to be repaid and is tax free because it’s included as your yearly income. The only downside to reverse mortgage is the debt on home increases, equity diminishes, and the upfront costs and expenses can be pretty expensive.
A new trend in helping to solve the foreclosure dilemma is loan modifications. Loan modifications enable you to find an affordable mortgage payment for your situation. You negotiate terms on your current loan instead of having to reapply with different companies. Loan medications save time and money. In order to be able to obtain a loan modification there are a few standards that must be met. Loan modifications were put in place for people going through a financial hardship for example unemployment. The unemployed must provide proper documentation outlining the hardship, you must be at least three payments behind on your current mortgage, and have not filed a bankruptcy. If, you feel you may qualify for a loan modification contact your current lender or service owner for your property.
Through minimal research we have been able to provide you with 3 ways to solve your mortgage worries. But, we shouldn’t let this economy be our downfall as well. Stop the world from taking from you what’s rightfully yours, and explore all options with an open mind. The welfare of yourself and your family is at risk.
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