DROP DOWN OPTIONS 1. (things we own, things we do)
2. (physical assets, moveable objects, easily convertible into cash)
3. (cash or money in a savings account, clothing and furniture, a car or house)
4. (decrease, increase)
5. (borrowed, previously invested)
6. (advantage, disadvantage)
7. (may not, must)
8. (decrease, increase)
9. (reducing, increasing)
10. (damaging, protecting)
11. ( an emergency, a vacation)
12. (three to six, one to two)
13. (important and expensive expenditures and retirement, small repetitive purchases *such as groceries)
14. (decrease, increase)
15. (simple, compound)
16. (reduce, increase)
17. (asset acquisition, insurance, liability, savings and investment)
18. (asset acquisition, insurance, liability, savings and investment)The financial planning process - Part 2 What Are the Activities Involved in the Process of Personal Financial Planning? Personal financial planning requires you to engage in a variety of different planning activities, including asset acquisition planning; liability and insurance planning; savings, investment, and tax planning; employee benefit and retirement planning; and estate planning. The nature and complexity of these planning activities will flow from your goals and personal circumstances, such as your current and expected future income, your wealth and available financial resources, and the current place in your life cycle. Changes in your circumstances or the economy can necessitate changes to these planning activities. What is asset acquisition planning? Asset acquisition planning is one of the earliest financial activities you undertake in life. It involves the purchase of, including tangible and financial assets, liquid assets, investments, and personal and real property. Tangible assets areandare held either to consume and use or to generate a return or income as an investment. An example of a tangible asset is. In general, the cost and value of your tangible, personal, and real assets tend towith your age, income, and wealth, all other things remaining constant. The value of your financial and liquid assets, on the other hand, tends to be a function of economic conditions and your investment returns. What are liability acquisition planning and insurance planning? Liability acquisition planning addresses how you are going to pay for your asset purchases using liabilities, ormoney. Theof liabilities is that, by law, the moneybe repaid. In general, your borrowing needs tend toas you acquire additional and/or more expensive assets. Insurance planning, on the other hand, provides a way ofyour financial risks andyour income and assets Improper insurance planning can be expensive and can lead to unprotected possessions. What is savings and investment planning? Savings and investment planning considers the type and characteristics of the investment vehicles used to generate future investment income and returns, using both previously accumulated income and unspent income from the current period. One of the first savings accumulations recommended by financial advisors isfund, which should containmonths' worth of income. The purpose of most long-term savings activity is to accumulate funds for. In general, it is desirable tothe return earned on your invested funds (assuming you are not significantly increasing risk), to earninterest on your funds, and tothe fees associated with the accounts. Diego's Case Anna's Case Diego and his fiancée, Sarah, Anna has decided to restructure are getting married in two months. some of her investments. Both are facing expiring leases on Concerned about expectedtheir apartments, so they are future downturns in the stockdebating whether to purchase a market, she's considering selling small house or a condominium some shares of stock and purchasing a rental property to generate more stable income streams planning planning This is an example of. This is an example of.