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Financial Planning For Every Walks Of Life
During the course of a lifetime, there are different stages for financial planning much like the 4 seasons in a year. Financial planning helps people in having a better understanding of where you currently stand financially, how to plan for where you like to go and on how to prepare yourself for the challenges that might be ahead of you.
Obviously, different situation has unique aspects including circumstances which you start implementing a financial strategy and age. To make things simple, the stages that financial planning follows are the following:
Number 1. Building assets – at the start of your career, accumulating assets is mostly the focus of your finances. At this stage, the most valuable asset you have is your capability of earning income and therefore, investing in your career is so important. In addition, it will be a very smart move of you to establish emergency fund, pay off student loans and build your personal savings.
Number 2. Invest for future – as you become a more successful person, so does your finances, which give you power to increase discretionary income. You have to plan and save for your future goals similar to comfortable retirement and/or a child’s education at this stage. To be able to have opportunities for potential growth, make an effort to have a tax diversified and well balanced portfolio.
Number 3. Planning for retirement – as you are nearing in your retirement, planning for it becomes your priority. You can kick this off by thinking of what your goals and dreams are for retirement and then, have a detailed plan on how you could get there. You want to be sure as well that you have flexibility to take income in ways that are tax efficient to allow you enjoy your lifestyle while being prepared for unexpected retirement.
Number 4. Generate retirement income – by the moment that it’s time to enter retirement, you may now begin implementing the retirement plan and enjoy the assets you have accumulated. After few months of enjoying retirement, it will be smart to reevaluate the plan you have just made and do any adjustments necessary to make sure that you are on the right path.
Number 5. Leave a legacy – leaving a legacy becomes paramount importance as you become older and financially secured. Legacy is all about the impact you have made on charities, people as well as causes that matter to you. It’s also about ensuring that you have the right beneficiaries to protect your assets.
Regardless of what stage you are currently in financial planning, having legal and financial documents to be structured properly are so important to transfer your assets.
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