How's Your Financial Position?
The financial condition analysis portion of the financial plan
provides the framework upon which the plan is built. The study of
your cash flow and balance sheet can provide great insight into
how to maximize your wealth and accomplish your financial goals.
• Cash Flow Management
This aspect of planning deals with the day to day allocation of
income; and its effective use in paying for current living expenses
and in accumulating assets which will be used in meeting financial
goals.
• Personal Savings
A key building block of your financial plan is your ability to save
money. If you are able to diligently save, you can increase your
chances for meeting realistic financial goals.
• The Power of Compound Interest
The effect of compound interest can have a tremendous influence
on your savings. Because compound interest allows you to earn
interest on your interest, this allows your money to work harder
for you.
• Balance Sheet Review
This involves a study of your assets and liabilities, also known as
"what you own and what you owe". Your net worth is determined
on the balance sheet. Our goal is to help you maintain and build
your net worth.
• Debt Control
To reduce your debt efficiently, it is important to eliminate high
interest rate debt first. Also, to manage debt properly, it’s
important to distinguish between “good debt” and “bad debt”.
From a purely financial perspective, “good debt” refers to
borrowing to purchase assets that are likely to appreciate in value,
such as a home or a business. Conversely, “bad debt” refers to
borrowing for a consumable, such as a vacation, or for an asset that
is likely to depreciate in value, such as an automobile.
• Emergency Savings Fund
We recommend you plan for the unexpected by having three to six
month’s worth of living expenses in a liquid account. During a
financial emergency you will be able to obtain cash easily without
incurring a significant loss or debt.
| For an endless streams of income, you need a financial plan |
"Wealth Creation Through Financial Planning"
