Financial Planning: Goals, Developing a Plan, and the Three Stages of Wealth Management, Slides of Fundamentals of E-Commerce

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Goals: The Cornerstone of a Financial

Plan

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Goals keep the future in mind by remindingyou of the rewards.

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Goals entice you to keep the plan in effect.

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Goals provide tangibility for the question,“Why?”

Step 3: Develop a Plan of Action

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Flexibility -- The abilityfor your plan tochange as yoursituations or goalschange.

Liquidity -- Your abilityto convert noncashassets into cash withrelative ease andspeed.

Step 3: Develop a Plan

(cont’d)

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Protection -- Your ability to meet theunexpected large expenses without destroyingyour plan.

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Minimization of Taxes -- Your ability to pay aslittle as possible to Uncle Sam.

Step 3: Develop a Plan

(cont’d)

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Consider future needs:

Create a budget - Determine investment strategies - Plan for big-ticket purchases - Plan for managing debt - Plan for insurance - Plan for the expense of children and college - Plan for retirement - Plan for estate transfer

Step 4: Implement Your Plan

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Use common sense and moderation; don’tforce yourself to track every penny.

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Remain positive about your plan; use it as aroadmap.

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Stay on track after the detours; rewards awaityou.

Step 5: Revise Your Plan

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Periodically review your progress to see if anyfine tuning needs to be done.

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Make sure that your plan still matches yourgoals.

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Be prepared to start over if your plan nolonger meets your needs.

The Life Cycle of Financial Planning

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Stage 1: The Early Years -- A Time of WealthAccumulation

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Stage 2: Approaching Retirement -- TheGolden Years

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Stage 3: The Retirement Years

Stage 1: The Early Years -- A

Time of Wealth Accumulation

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Develop your savingsplan.

Set your initial goalsof all lengths. - Establish your long-range investmentstrategy.

Stage 2: Approaching Retirement --

The Golden Years

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Realize intermediate-term goals that wereestablished duringStage 1.

Re-evaluate the planto match currentgoals. - Plan for retirement.

Stage 3: The Retirement Years

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Reduce investmentrisk

Concentrate onpreservation ratherthan growth of assets - Plan for the transferof your estate