| Have you ever met with a financial
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| | million dollars by the time you're 55
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| planner? If you haven't, you can expect
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| | years old. Oh, and it will be exact to
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| to go through a certain process. You will
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| | the penny. For example, $5,387,234.23.You
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| be asked about your financial goals. One
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| | will look at the plan and you will think,
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| of your goals will likely be that you
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| | "My gosh, there is no way I can do this!"
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| want to plan for retirement.You will be
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| | You may get started doing a few things
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| asked about your present income. You know
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| | that the planner recommends. But it won't
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| the answer to that one. You will be asked
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| | last very long and you'll go right back
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| about your expenses. That one will be
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| | to doing things the way you've always
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| tough. Everyone underestimates their
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| | done them.So what's wrong with the
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| expenses because most of us have no idea
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| | traditional financial planning process?
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| what we're really spending and what we're
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| | Plenty! First of all, it's ridiculous to
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| spending it on.You will be asked about
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| | try to look decades in the future to
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| your assets -- what you own. You know
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| | predict what's going to be happening in
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| what you own, but it will be tough to put
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| | your life. I don't know about you, but I
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| a market value on some of it. You will be
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| | don't know what's going to happen
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| asked about your liabilities -- what you
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| | tomorrow, much less decades from now.
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| owe. For most people, facing the reality
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| | Also, traditional financial planning
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| of their debts is rather daunting.You
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| | doesn't take into account what financial
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| will be asked when you want to retire. I
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| | freedom actually is. You're financially
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| would say the average age most people
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| | free when your passive income (money you
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| give is 55 years old. I don't know why
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| | don't have to work for) equals your
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| that is, but 55 seems to be a popular
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| | expenses.So if you have no passive income
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| number. Then the financial planner will
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| | right now and your expenses are $50,000 a
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| tell you that you will need to accumulate
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| | year, and you can get a 10% return on
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| enough money to live another 40 or 45
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| | your investments, you need to accumulate
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| years after retirement. After all, if you
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| | $500,000 to become financially free.
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| live to 90 or 95 you don't want to run
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| | If you can get a higher return on your
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| out of money, do you?You will also be
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| | money, you can reduce the amount that
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| asked about your risk tolerance so that
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| | must be accumulated. If you settle for a
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| the planner can determine what kind of
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| | lesser return because you're risk averse,
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| annual rate of return to factor in for
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| | you will need to accumulate more. You
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| your investments. If you say you have a
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| | should also consider inflation. Of
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| low risk tolerance, the planner will
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| | course, if you invest for inflation, it
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| consider low-risk investments that will
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| | will already be factored into your
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| give you a lower rate of return. If you
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| | investments.Understanding financial
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| say you have a high risk tolerance,
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| | freedom as the point where your passive
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| investments that could provide a higher
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| | income equals your expenses is a much
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| rate of return will be considered. You
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| | more realistic way to look at it. Most
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| can't have it both ways. If you don't
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| | people who are committed to being
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| take risks, you can't get a very high
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| | financially free can achieve their goal
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| rate of return on your investments.Then
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| | in a matter of a few years, not
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| all that information will be dumped into
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| | decades.Copyright 2005Larry Holmes
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| a financial planning software program.
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| | invites you to visit
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| The software will print out a plan that
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| | Your common sense guide for financial
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| will say you need to accumulate several
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| | and investment success.
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