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| The Planning Process |
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Financial Planning is
- A lifelong process of fact gathering, discernment and actions to manage your financial resoursces
- Choosing a planner based upon your time, capabilities and wishes
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#1 Determine Your Values, Goals & Expectations
- Identify one or more of the reasons for seeking financial planning advice...
- Business development
- Impending Retirement
- Pension/IRA Evaluation
- Impending Education for children, self or others you would like to help
- Erosion of Investment Assets
- Special Circumstances Planning
- Birth, Death, Marriage
- Job Loss, Divorce, Disabled or permanently dependent family member
- Financial Windfall such as an Inheritance, Stock Option Grant or gambling winnings
- Financial Disaster due to legal judgement, natural disaster
- Identify personal values to be taken into account as you make decisions about
- Spending, debt, savings and investing
- Charitable giving
- Retirement spending
- Your last wishes
- Living Will, Health Care Power of Attorney (HCPOA)
- Distribution of remaining assets
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#2 Gather, Analyze & Evaluate Your Data
- Determine Your Personal Financial Status
- Net Worth (Balance Sheet)
- Current and Projected Net Income (Income less expenses)
- Cash Flow (Inflows-outflows)
- Identify upcoming expenses not in current cash flow
- Identify Spending/Saving patterns
- Compute Financial Ratios that will help you determine if you need to continue or adjust your current patterns
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#3 Develop the Financial Plan
- Compute and determine directed savings directed savings needed to meet desired goals
- Identify strategies to manage and control your cash flow
- Make decisions about future savings vs current wants and needs
- Apportion desired diversification and balance of investments
- Identify other tasks to assure ongoing control of your finances
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#4 Implement the Plan by Identifying...
- Tasks you will take upon yourself
- Tasks to be undertaken by your Financial Planner
- Tasks to be undertaken by other family members
- Tasks to be undertaken by other professionals
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#5 Monitor & Adjust Your Plan Regularly
- Insurance needs
- Adjust financial plan to accomodate life changes in past or upcoming year: birth, marriage, divorce, death, college, health changes
- Update legal documents to accomodate changes
- Wills & trusts
- Health Proxys
- Insurance, IRA (beneficiary documents)
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