Financial Planning Process Analysis

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The purpose of establishing a financial plan is to allow us to achieve our financial goals. Developing a financial plan not only will guide us to control our financial situation and also accumulate wealth and help us to improve or maintain our standard of living. In fact, most people feel that hire a professional financial planner to form a financial plan is more professional. However, in my viewpoint established the financial plan by yourself is even more meaningful. Now let us discuss how to effectively apply the six-part process to develop a robust financial plan.

Step 1 develop your financial goal
Before developing the financial goal, we required taking an honest and detailed assessment to determine your current financial situation, …show more content…

The planner should remember opportunity costs will always involve when making a decision. For example, when you decide to invest in a high-risk stock, you must know that you cannot assume the risk as low as the bond market. In other words, if you choose to assume the low-risk investment, the low return you earned, this is called opportunity cost. At the same time, the uncertainty will exist forever in your financial plan. Even if you have fully planned your financial plan, still possible face some factors that you cannot predict like when economic decline causes planner decides to reduce the number of investment in order to deduct their …show more content…

Despite the fact that the plan is perfect, but still have some fact unavoidable; life happens. For this reason, it is a must to review your financial plan regularly. When any variable occurs, you will be able to adjust your plan as often as needed. For example, your goals may change. Currently, planner set the specific goal is having a house but due to the discouraged by the current financial condition and led to a temporary disappearance from the list of priorities and planner should reset new goals and your financial plan has to be reorganized in order to guide your current aims. We can say that when your life will change and your financial plan will change as well. So planners must be aware that the original strategy may not have the expected results and may need to be adjusted to help you meet your demand goals. If the planner is a life circumstance change quickly such as a student, he or she may choose to review these goals every six months. In contrast, if the planner's life tends to be more stable such as retirees may choose to review once a year. All the planner must be faithful in reevaluating their plan from time to time to ensure your goals haven’t

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