THE COMPONENTS OF FINANCIAL PLANNING. There are different levels of financial planning and they have a purpose of ensuring that a person receives growth, safety, and security. There are three levels in financial planning. The levels include a safe and secure plan, a comfortable plan and a rich plan. The safe and the secure financial plan has three components which are the protection component, the saving component, and the growth component. Some of the basic financial plans found in the protection component include the car and home insurance, liability umbrella insurance, disability, life and health insurance. Any member of the family should be able to access these insurance covers regardless of who gets disabled and who dies. During the financial plan you should focus on the strategy and not the products. For example you will find so many insurance covers in different companies and you should concentrate on the relationship that you will create with the company instead of the products they are going to offer you. The second component of the financial plan is the growth component which is a safe and secure plan. As a way of securing your account, you should take the growth component where you will cut the expenses for three to six months. This is the safest financial plan because it ensures that your family survives even after you have stopped earning. If the bread winner of a family dies or loses a job, becomes disabled or dies most of the families suffer. As the provider of the family you should put some money aside that your family will be using as you try to solve all your problems. It is important that you consider the benefits being offered by your company as a way of finance planning. Also, consider the retirement plan as one way of your financial planning because it is a savings plan. With the retirement plan you can accumulate so much money because the money has some discipline that it cannot be used until you retire.
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The third component where you do the financial planning is in the comfortable component. With this component you can be able to build the real wealth. If you want to build the real wealth you will have to start with putting a little amount of money in the stock account or in the mutual funds account depending on the financial capability a person has. From this financial plan you can be able to transit from the safe and secure plan to the comfortable financial plan. The main aim of financial planning is analyzing your current financial status, make suggestions and recommendations that will help you secure your long-term financial future. The financial advisor you choose to work with should understand your financial aims and objectives so that they can be able to assist you to plan your finances successfully.Looking On The Bright Side of Tips
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