Financial Planning - The Basics Of Making Financial Plans

What is financial planning, and why it is crucial for you.

Even if you do not think you are a financial planner, you better start thinking like one fast. In the United States, there is an approximate of 5.6 million people who are either self-made millionaires or financially independent. And what is so hard to believe about that statistic, you ask? This is because that is only about 5% of the American population.

The remaining 95% of the American population (we're talking about 106.4 million people here!) are not only not rich, but most of them are facing financial disasters, either owing to poor financial planning or foolish spending!. This is why you should start thinking like a financial planner. Financial planning is not so complicated, and it can make a huge difference in your life.

Read more »

Tips for Financial Planning

The following tips will help get you in gear to start your financial planning. Once you have made financial planning part of your routine, it won't seem so difficult. But getting your financial planning started can be the most difficult thing. These tips will help motivate you to make financial planning one of your main goals.

Financial Planning Tip #1 Pay off Debt

One of the biggest factors fighting against financial planning is debt, especially credit card debt. If something starts off as a small debt it turns into a big one simply because you were not paying off the debt. Financial planning means you have a plan and paying off debt should be the first goal of your plan.

Financial Planning Tip #2 Invest

Another financial planning tip is to invest. Financial planning means you are saving for the future in many cases, so you will want to take money you earn today and invest in the stock market, in bonds, IRAs, 4019k) or a mixture of all of the above. Saving your money with the help of financial planning will help money grow all on its own.

Read more »

Financial Planning - Who Really Needs It?

If you think you're too young for financial planning, or if you believe you've left it too late, think again. No matter what stage you have reached in life, sound financial planning is very important. Financial planning is all about lifestyle. It's about protecting the lifestyle your currently enjoy, for yourself and your loved ones; and it's also about planning for the lifestyle you want to enjoy in the future. However, as you progress in life, your financial priorities changes as your circumstances change. That's why you need to review your financial plan regularly to ensure that it still suits your needs.

Young, Free and Single

At this stage you are probably more interested in having fun and enjoying life than you are in financial planning. I totally agree that it's very important to enjoy life and have fun with your friends. However, small financial planning steps taken at this time will make a huge difference to you in the future.

Key financial areas for you include:

    Saving regularly
    Starting a pension
    Insuring your income
    Critical illness cover
    Mortgage advice

Read more »

Let Me Explain the Financial Planning Process

I want to use this article to explain the financial planning process. Many competent, well-educated adults readily admit they struggle with even basic financial concepts. This really isn't surprising since most school curriculums don't teach financial management principles. But this is where a professional financial planner comes into the picture. Financial planners work with people and help them coordinate and manage the financial aspects of life.

Unfortunately, many people are reluctant to work with a financial planner because they are unfamiliar with how the financial planning process works.

The financial planning process explained

The process of financial planning can generally be broken down into seven basic steps:

Step 1 - Preliminary Meeting & Evaluation

During an initial interview, the financial planner and the prospective client get to know one another. This generally involves a first meeting during which the planner explains the nature of services to be provided and the way in which he or she is paid for these services. In turn, the prospective client has an opportunity to determine whether the planner has the ability to offer the types of services that are needed. The planner should take this opportunity to get some general idea of the prospective client's current financial position and long-term goals. It is important for both parties that the relationship begins on a basis of mutual trust and confidence.

Read more »

Financial Planning - A Fascinating Career Option

Dreaming about a career that gives you a secure job, fame, money, career growth and satisfaction? A career as a financial planner can be your ideal career option. As a financial planner you need to work with numbers and with people. A course in financial planning teaches you how to save, spend and invest intelligently.

History of Financial Planning

The financial service sector has come a long way since the last decade. Earlier there were distinct divisions within the industry such as banks, brokers, agents, mutual fund agents and so on. So an individual needed to go to the bank for taking loans, consult brokers for investments. Mutual funds were a completely different sector.

Read more »

Free Financial Planning - One Must Give Before They Can Receive

The general concepts of financial planning are heavily rooted in high moral and ethical standards. Rather than randomly investing and making general assumptions regarding one's finances, the true purpose of a financial plan is to provide a detailed and unbiased understanding of one's financial picture in order for them to achieve their specific goals. Establishing a foundation of financial planning has helped many clients and advisors alike bring logic and reason as to why and how to invest, helping to supplant the negative emotions of investing with a sense of financial confidence and security. With this said, one could suffice that a financial plan would be the basis for nearly all financial decisions. Likewise, it could be utilized by nearly every financial professional in helping determine proper suitability for their clients. Needless to say, all people would benefit from an objective financial analysis by a qualified professional, and these professionals would then benefit from implementing their unbiased advice. Why then should a client have to pay for financial planning services in the first place? Or, to put it more directly, why should a client have to pay a fee in an attempt to ensure that their best interests are being met? The answer is rather straight forward. Financial planning should be free.

The first question that must come to mind is, "Well then how does the financial planner make a living?". Believe me when I tell you, they make a living, and a handsome one at that. It is not the financial planning fee from which they reap their vast rewards. When a client pays for a "financial plan" they are paying only for advice. The advisor or planner is still going to receive a commission from implementing the plan, and that is where the majority of their income is produced. So be careful of a professional who designates themselves as simply, "fee-based". This means that they are either charging for the financial plan while also collecting a commission, or even worst, simply charging a management fee for allocating your portfolio. Unfortunately, not many financial professionals let this be readily known, and make it appear as if they are being compensated only for their expertise in the form of the financial planning fee.

Read more »