What Is a Financial Plan? Financial planning itself is not new, or even very exciting. Well-run businesses have been practicing this common-sense activity since the dawn of the capitalist era. What is new is the application of sound financial management techniques to personal as well as business affairs. Systematic personal financial planning involves considering one’s…
On my computer, I have a sticky note listing a targeted level of the S&P 500 index. Should the index fall to this level, I will accelerate the timing of planned contributions to my wife’s and my individual retirement accounts. The number on the note, 2,520, is the point at which the S&P 500 will…
Financial planning for the most part can be self-administered. But there are times that others will be turned to for help. Attorneys, accountants, financial planners, trustees, guardians and executors are all examples of people an individual may use at some point in time for help in various aspects of financial planning. Most individuals have a…
Financial planning is a process that is tackled by many individual investors quite successfully on their own. But some individuals prefer to have someone else perform the task. The question then arises: How do you find a financial planner? The selection of a financial planner is a very important and, sometimes, very difficult task. There…
Investors commonly use stock ratios such as price to earnings, price to book and dividend yield to assess the financial health of a company. The reasons the ratios are so widely used are because they convey a great deal of information in a concise format and allow investors to benchmark a company’s financial status. When…
Many investors today who had planned to retire early at 62 when they became eligible for Social Security benefits—albeit at a reduced rate compared with retiring at full retirement age—are discovering that those benefits, combined with their retirement savings, cannot support the lifestyle they expected or provide the financial cushion in retirement they desire. Often,…
The question every investor wants to know is: How well am I doing? Although some people are satisfied with simply watching the dollars grow, most investors want that translated into a performance figure. Bragging rights aside, there is a good reason to determine your own portfolio’s performance: Measuring the performance of your total portfolio is…
Whether you are planning for a major purchase, financing an education or planning for retirement, an analysis structure that explicitly considers investment returns, cash flows and horizon is crucial to your eventual success. Expected inflation and variability of investment return present difficulties in any planning environment, and the longer the investment horizon, the more important…
Many people do not see an estate plan as necessary. Others recognize the need to plan, but have no idea whom to contact or how to begin. Estate planning encompasses much more than simply protecting one’s assets; it provides peace of mind that your assets will pass according to your wishes at the least cost…
Setting financial priorities is frequently very difficult for individuals. Yet, it is very important for most people, since few of us have the financial resources to totally finance all of our “wants.” Setting priorities allows us to consciously review our objectives and rank them as to the order of their importance to us. It also…
