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Expanded rollovers from 401(k) and other employer plans to Roth IRAs now permitted.
With the wide variety of stocks in the market, figuring out which ones you want to invest in can be a daunting task. Many investors feel it’s useful to have a system for finding stocks that are worth buying, deciding what price to pay, and realizing when a stock should be sold. Bull markets–periods in which prices as a group tend to rise–and bear markets–periods of declining prices–can lead investors to make irrational choices. Having objective criteria for buying and selling can help you avoid emotional decision-making.
Even if you don’t want to select stocks yourself–and many people would much prefer to have a professional do the work of researching specific investments–it can be helpful to understand the concepts that professionals use in evaluating and buying stocks.
There are generally two schools of thought about how to choose stocks that are worth investing in. Value investors focus on buying stocks that appear to be bargains relative to the company’s intrinsic worth. Growth investors prefer companies that are growing quickly, and are less concerned with undervalued companies than with finding companies and industries that have the greatest potential for appreciation in share price. Either approach can help you better understand just what you’re buying–and why–when you choose a stock for your portfolio.
Value investors look for stocks with share prices that don’t fully reflect the value of the companies, and that are effectively trading at a discount to their true worth. A stock can have a low valuation for many reasons. The company may be struggling with business challenges such as legal problems, management difficulties, or tough competition. It may be in an industry that is currently out of favor with investors. It may be having difficulty expanding. It may have fallen on hard times. Or it may simply have been overlooked by other investors.
A value investor believes that eventually the share price will rise to reflect what he or she perceives as the stock’s fair value. Value investing takes into account a company’s prospects, but is equally focused on whether it’s a good buy. A stock’s price-earnings (P/E) ratio–its share price divided by its earnings per share–is of particular interest to a value investor, as are the price-to-sales ratio, the dividend yield, the price-to-book ratio, and the rate of sales growth.
Value-oriented data
Here are some of the questions a value investor might ask about a company:
What would the company be worth if all its assets were sold?
Does the company have hidden assets the market is ignoring?
What would the business be worth if another company acquired it?
Does the company have intangible assets, such as a high level of brand-name recognition, strong new management, or dominance in its industry?
Is the company on the verge of a turnaround?
Contrarians: marching to a different drummer
A contrarian investor is perhaps the ultimate example of a value investor. Contrarians believe that the best way to invest is to buy when no one else wants to, or to focus on stocks or industries that are temporarily out of favor with the market.
The challenge for any value investor, of course, is figuring out how to tell the difference between a company that is undervalued and one whose stock price is low for good reason. Value investors who do their own stock research comb the company’s financial reports, looking for clues about the company’s management, operations, products, and services.
A growth-oriented investor looks for companies that are expanding rapidly. Stocks of newer companies in emerging industries are often especially attractive to growth investors because of their greater potential for expansion and price appreciation despite the higher risks involved. A growth investor would give more weight to increases in a stock’s sales per share or earnings per share (EPS) than to its P/E ratio, which may be irrelevant for a company that has yet to produce any meaningful profits. However, some growth investors are more sensitive to a stock’s valuation and look for what’s called “Growth At a Reasonable Price” (GARP). A growth investor’s challenge is to avoid overpaying for a stock in anticipation of earnings that eventually prove disappointing.
Growth-oriented data
A growth investor might ask some of these questions about a stock:
Has the stock’s price been rising recently?
Is the stock reaching new highs?
Are sales and earnings per share accelerating from quarter to quarter and year to year?
Is the volume of trading in the stock rising or falling?
Is there a recent or impending announcement from or about the company that might generate investor interest?
A momentum investor looks not just for growth but for accelerating growth that is attracting a lot of investors and causing the share price to rise. Momentum investors believe you should buy a stock only when earnings growth is accelerating and the price is moving up. They often buy even when a stock is richly valued, assuming that the stock’s price will go even higher. If a stock falls, momentum theory suggests that you sell it quickly to prevent further losses, and then buy more of what’s working.
The most extreme momentum investors are day traders, who may hold a stock for only a few minutes or hours then sell before the market closes that day. Momentum investing obviously requires frequent monitoring of the fluctuations in each of your stock holdings, however. A momentum strategy is best suited to investors who are prepared to invest the time necessary to be aware of those price changes.
Why understand investing styles?
Growth stocks and value stocks often alternate in popularity. One style may be favored for a while but then give way to the other. Also, a company can be a growth stock at one point and later become a value stock. Some investors buy both types, so their portfolio has the potential to benefit regardless of which is doing better at any given time. Investing based on data rather than stock tips or guesswork can not only assist you as you evaluate a possible purchase; it also can help you know when to sell because your reasons for buying are no longer valid.
Have you heard about T. Harv Eker? If not, you should have! He became a millionaire in only two and a half years, using the principles he now teaches to others, then founded Peak Potentials Training to help other people follow in his footsteps.
I was skeptical about Eker’s claims when I first encountered them. After all, it seems like it’s impossible to do this well in such a short time. Then I heard about the principles behind his methods.
Basically, Eker tells us that in order to become a millionaire, I have to think like one. Every one of us has an internal financial blueprint that dictates how we use and think about our money. This dictates our financial success over the course of our lives.
Because of this, even those of us with a lot of financial knowhow could be holding ourselves back. Fear, doubt, and worry are all signs of a poor financial blueprint. Millionaires have a different way to think about money, and it helps them be successful in every part of their lives.
Eker’s parents were poor European immigrants who had only a few dollars when they came to North America, and he grew up fairly poor. However, he was able to change the way he thought about money and turn things around, and now he’s willing to share that knowledge with everyone else! Using the Peak Potentials Training group and his books, you’ll have the ability to learn how to succeed.
However, this process isn’t necessarily comfortable. It can be fairly difficult to open up our minds and change how we think about success and money. People who don’t really have the interest and dedication required to change their lives might want to look elsewhere.
Of course, if making a difference in your success is important to you, you might benefit from T. Harv Eker and his work. A change to your personal financial blueprint could be just the thing you need to turn your life around. The high intensity style of Eker’s programs makes it easy to keep going, making it through even the worst road blocks to success.
If, like most of us, you’ve been striving to be a success without much luck, don’t give up. If I could change the way I think about money and take control of my personal destiny, so can you. All you’ll need is to be shown how.
While it might seem like the road to success is a long one, remember to pay attention to your progress. When you change your internal blueprint, you actually start seeing results right away - they’re just small ones. Those are the signs that you’ll get to your personal peak in the end.
If you’re not sure that T. Harv Eker has the answer for your success, remember that I was skeptical when I looked at his results, too. The best way to find out is to learn more, so take a little time, examine what he has to say, and make your own conclusions. You’ll be amazed at the difference a little mindset change can make.
It is apparent financial statements have a lot of numbers in them and at first glimpse it can appear awkward to read and understand. One way to interpret a financial report is to calculate ratios, which means, separate a certain amount in the fiscal report by another. Financial statement ratios are likewise structural because they enable the reviewer to compare a business’s actual operation with its previous performance or with another business’s performance, regardless of whether sales receipts or net income was bigger or smaller for the some other years or the other business. In other words, applying ratios can wipe out deviation in company sizes.
There aren’t many ratios in fiscal reports. Publicly owned business organizations are expected to report just one ratio (earnings per contribution, or EPS) and privately-owned commercial enterprises more often than not don’t report any ratios. Generally accepted accounting principles (GAAP) do not require that any ratios be reported, except EPS for publicly owned companies.
Proportions don’t allow for definitive responses, however, they are useful indexes, but aren’t the single factor in judging the profitability and effectiveness of a company.
One ratio that’s a usable indicant of a company’s profitability is the profit margin ratio. This is the gross margin divided by the sales revenue. Business Organizations do not reveal gross profit margin information in their external financial reports. This information is considered to be proprietary in nature and is kept confidential to shield it from challengers.
The profit proportion is really important in analyzing the bottom-line of a company. It indicates how much net income was earned on every $100 of sales revenue. A net profit proportion of 5 to 10 percent is common in most industries, although some extremely price-competitive industries, such as retail merchants or food market stores will show net profit proportions of solely 1 to 2 percent.
Finding A New Mortgages Might Appear A Good Idea, But Not For All.
Mortgage acceptance rates are falling to a low and the bank’s base rate is predicted to hit an all time low. Is this the time to be hunting for a remortgage?
Well, it all relies very much upon your own personal financial circumstances. If you are tied into a mortgage with redemption penalties then looking for a new mortgage might cost you more that it would save you. But if your current mortgage is approaching the end of the penalty term, or has finished any tie in periods, then it might be worth trying to compare mortage loan rates to see if there is a more efficient mortgage out there on the market.
There is also, sadly, another group of people for whom finding a new mortgage rate might not be an easy or a cheap option. If you are unlucky enough to have bought your property within the last couple of years, then with the plummeting property prices currently seen in the market, it’s possible that at best your property is worth only what it was worth when you bought it. At worst, for those that bought at the peak of the property prices, it is possible that you have lost quite a large chunk of what you paid for the property.
The problem here is that you could find that your current mortgage borrowing is too high for the lenders to be happy to lend to you. For example, if they were happy to lend you 90% of the value when you bought the property and it has now dropped in value by 10%, although the amount borrowed would be the same, the amount as a percentage of the property value has shot up to 100%. Many lenders are now dubious about such high lendings, in a lot of cases punishing those who are borrowing more than 75%. So although your borrowing might have seemed OK to the lenders when you took out your current mortgage, now they might not touch you with the proverbial barge pole.
And it’s not just those that have suffered property price drops that are in this difficult position. Until recently some lenders would actually lend up to 125% of the property’s market value. If you were in this position when you took out the mortgage, unless your property value has risen by almost 40% or more, you would still be looking to borrow more than 90%. This would leave a lot of lenders unlikely to be willing to help you.
If you are stuck with an expensive mortgage and want to move to a cheaper one, then the remortgage market can be a mine field. Make sure that you contact a mortgage advisor and let them compare remortgage rates for you, to see if they can find some suitable mortgages for you.
Keith Lunt writes on behalf of the comparemortgagerates.co.uk website, where you can find useful information about best mortgage interest rates and contact a local broker who may be able to assist you in finding a new remortgage product.
Whether you’re seeking to manage your own assets, control how your assets are distributed after your death, or plan for incapacity, trusts can help you accomplish your estate planning goals. Their power is in their versatility–many types of trusts exist, each designed for a specific purpose. Although trust law is complex and establishing a trust requires the services of an experienced attorney, mastering the basics isn’t hard.
A trust is a legal entity that holds assets for the benefit of another. Basically, it’s like a container that holds money or property for somebody else. There are three parties in a trust arrangement:
The grantor (also called a settler or trustor): The person(s) who creates and funds the trust
The beneficiary: The person(s) who receives benefits from the trust, such as income or the right to use a home, and has what is called equitable title to trust property
The trustee: The person(s) who holds legal title to trust property, administers the trust, and has a duty to act in the best interest of the beneficiary
You create a trust by executing a legal document called a trust agreement. The trust agreement names the beneficiary and trustee, and contains instructions about what benefits the beneficiary will receive, what the trustee’s duties are, and when the trust will end, among other things.
You can put almost any kind of asset in a trust, including cash, stocks, bonds, insurance policies, real estate, and artwork. The assets you choose to put in a trust will depend largely on your goals. For example, if you want the trust to generate income, you should put income-producing assets, such as bonds, in your trust. Or, if you want your trust to create a fund that can be used to pay estate taxes or provide for your family at your death, you might fund the trust with a life insurance policy.
Types of trusts
There are many types of trusts, the most basic being revocable and irrevocable. The type of trust you should use will depend on what you’re trying to accomplish.
Avoids probate: Unlike property that passes to heirs by your will, property that passes by a living trust is not subject to probate, avoiding the delay of property transfers to your heirs and keeping matters private
Maintains control: You can change the beneficiary, the trustee, any of the trust terms, move property in or out of the trust, or even end the trust and get your property back at any time
Protects against incapacity: If because of an illness or injury you can no longer handle your financial affairs, a successor trustee can step in and manage the trust property for you while you get better. In the absence of a living trust or other arrangement, your family may have to ask the court to appoint a guardian to manage your property
A living trust can also continue after your death–you can direct the trustee to hold trust property until the beneficiary reaches a certain age or gets married, for instance.
Caution:Despite the benefits, living trusts have some drawbacks. Property in a living trust is generally not protected from creditors, and you cannot avoid estate taxes using a living trust.
Irrevocable trusts
Unlike a living trust, you can’t change or end an irrevocable trust. You can’t remove assets, change beneficiaries, or rewrite any of the terms of the trust. Irrevocable trusts are most often used to minimize estate tax. The transfer may be subject to gift tax on the value of the property at the time of transfer, but the property, plus any future appreciation, is removed from your gross estate. That means your ultimate estate tax liability may be less, resulting in more property that can pass to your heirs.
Tip:Each taxpayer has a $1 million lifetime exemption from the federal gift tax, so you may not actually have to pay the tax. You may owe state gift tax, though, if you live in one of the handful of states that impose gift tax.
Additionally, property transferred through an irrevocable trust will avoid probate, and may be protected from future creditors.
In a few short weeks I’m flying to Atlanta in the U.S. on a business trip. I haven’t been to the United States for some years so I’m hoping that I might be able to pick up a bargain or two while I’m away.
The British pound is not as strong as it used to be against the dollar with today’s exchange rate around $1.52 for one pound. Nevertheless it still looks like I’ll be able to grab a few bargains while I’m stateside.
Games consoles are high on my list of priorities (according to my children). The Xbox 360 is currently priced at around £148.49 in British stores, which equates to approximately $226. The same games console can currently be purchased for about $199.99 in the U.S.
A similar difference in price exists for the Nintendo Wii. In the U.K. this sought after games console will cost £198.49 which equates to about $303. In the U.S. this unit will cost about $249. The Sony Playstation 3 costs £308.49 or $470.66. One of these popular games consoles will cost around $399.99.
Significant price difference between the U.K. and the U.S. can be seen across a whole host of products. Take petrol, or gasoline, for example. In the U.S. a gallon of regular petrol will currently cost around $1.35. In the U.K. , currently, one litre of petrol costs about 89p. This equates to about £3.36 per gallon, or a massive $5.13. A huge difference compared with what the Americans are paying for their gasoline.
When I fly over to Atlanta, in a few weeks time, I’m planning to leave my car at Heathrow so that I can drive home on my return. I’m therefore shopping around for the best pre-booked heathrow airport parking price. These charges currently range from £48 to £161 for a 1 week stay. This equates to $73.23 to $245.
Looking at the charges for parking at Atlanta airport, these range from about $41 to $62. An enormous difference when compared with the same service here in the U.K.
So, while there are some modest but significant differences in the prices of various games consoles many other products and services are enormously cheaper in the U.S. So why do the Americans have it so good?
Always use a comparison service to get the best pre-booked price for UK Airport Parking.
This can be a great time to look at cutting monthly expenses. Now that many Starbucks’ are closing that may be an easy expense to cut. In all seriousness, you may really need to get serious about your expenses during this rough economic time. This is a great time to sit down at the kitchen table and go through your monthly expenses. List everything that you spend money on each month. This is not about cutting all expenses of course, refinancing your life is about making sacrifices.
So what is meant by refi your life? It is quite simple. Our finances accrue and change over time. Many of us never pause to look at all of the expenses that have been adding up. There has never been a better time. Set realistic goals. There are expenses that cannot be eliminated. If you are willing to make some sacrifices you can eliminate many of your monthly expenses.
Start small. Can you pick up a newspaper at the store once or twice a week instead of having it delivered everyday? How about eating out a few less times each week? You can use this as a great opportunity. You can lower your grocery costs by opting for healthier meals in many cases. Consider skipping out on steak and opt for chicken. How often do you use your gym membership? There are many ways to exercise without going to the gym. Now start thinking about your own expenses. It is not as hard as you may think to make improvements to your expenses each month.
Major expenses may require a bit more work. Pick one day each week that you will spend on cutting your large expenses. You can look into your insurance situation and see if you can drop your rates. Consider reducing or changing your coverage.
Your mortgage payment is most likely your biggest expense. A home refinance can be used as a financial tool. There are many ways to reduce your mortgage payment or get into a loan program that makes more sense for your lifestyle than the mortgage that you are currently paying. Payoff credit cards with your mortgage. You may want to reduce your expenses by paying off your auto loans with a home refinance. You may realize that you can afford a shorter term mortgage once you roll your monthly payments into your mortgage. There is a possibility of obtaining a refi with the lowest rates.
This will be much easier than you may initially think. It is just a matter of getting started and often starting small will help. Stay focused, we often dig ourselves into a hole without even realizing it. You will feel as if a huge weight was taken off of your shoulders when your are done. Don’t you want financial freedom?
Acquiring a house is stimulating and overwhelming all at the same time. There is no doubt that you will be faced with a lot of decisions and probably will make a mistake from time to time make a mistake. You will also realize that some home mortgage loan mistakes are more pricey than others.
Not fixing your credit is the first error you will want to avoid when buying a home. The number of buyers who apply for a home mortgage loan hoping their credit won’t prevent them from having a loan is amazing! In order to not be in the situation of “hope and wait”, it is advised that you attain copies of your credit scores at least three to four months before hunting for a home. This way if there are any mistakes you will be able to correct them and if there are any legitimate elements hurting your score, you can work to repair them.
In order to purchase a home, you will surely have to ask for a home mortgage loan. Not getting pre-approved for a loan is the next home mortgage loan error that you would like to stay away from. Firstly, make sure you understand the difference between pre-qualified and pre-approved. Being pre-approved is a strict process as it implies you really apply for a home mortgage loan. To be pre-approved, you will have to submit your tax returns, pay stubs and many more information. If there is no problem with your case, you will get a loan.
Determining on how much you need to borrow is the third thing that you will have to do. There is no reason to make the error of asking too much money to afford a home that is out of your reach. There are several things to consider about this. Indeed, your home mortgage loan payments can be higher than you paid for rent but there are also other things you will have to pay as a homeowner: real estate taxes, homeowners insurance and higher bills for public services. Be careful regarding the amount of money you borrow as you will have to pay interest for years to come.
Sometimes, there are things that do not need a lot of time or research to be done. However, with that kind of big purchase, you certainly will have to take your time to look around for rates and terms. If you do not know what the prevailing interest rates are for your home mortgage loan, it can be pricey. Depending on your country, you are at the risk to get stuck with interest rates for someone who haspeople with bad credit while actually you have a decent one.
As you can see, there are many home mortgage loan mistakes to stay away from when deciding to buy a home. A lot of elements from not getting pre-approved to not fixing your credit can be damaging to the loan you get and what kinds of interest rates you face. It may take time to get the lowest home mortgage rate possible for your situation but it is the best way to become a homeowner.
Charitable giving can play an important role in many estate plans. Philanthropy cannot only give you great personal satisfaction, it can also give you a current income tax deduction, let you avoid capital gains tax, and reduce the amount of taxes your estate may owe when you die.
There are many ways to give to charity. You can make gifts during your lifetime or at your death. You can make gifts outright or use a trust. You can name a charity as a beneficiary in your will, or designate a charity as a beneficiary of your retirement plan or life insurance policy. Or, if your gift is substantial, you can establish a private foundation, community foundation, or donor-advised fund.
Making outright gifts
An outright gift is one that benefits the charity immediately and exclusively. With an outright gift you get an immediate income and gift tax deduction.
Tip:Make sure the charity is a qualified charity according to the IRS. Get a written receipt or keep a bank record (cancelled check) for any cash donations, and get a written receipt for any property other than money.
Will or trust bequests and beneficiary designations
These gifts are made by including a provision in your will or trust document, or by using a beneficiary designation form. The charity receives the gift at your death, at which time your estate can take the income and estate tax deductions.
Charitable trusts
Another way for you to make charitable gifts is to create a charitable trust. You can name the charity as the sole beneficiary, or you can name a non-charitable beneficiary as well, splitting the beneficial interest (this is referred to as making a partial charitable gift). The most common types of trusts used to make partial gifts to charity are the charitable lead trust and the charitable remainder trust.
A charitable lead trust pays income to a charity for a certain period of years, and then the trust principal passes back to you, your family members, or other heirs. The trust is known as a charitable lead trust because the charity gets the first, or lead, interest.
A charitable lead trust can be an excellent estate planning vehicle if you own assets that you expect will substantially appreciate in value. If created properly, a charitable lead trust allows you to keep an asset in the family and still enjoy some tax benefits.
Example: John, who often donates to charity, creates and funds a $2 million charitable lead trust. The trust provides for fixed annual payments of $100,000 (or 5% of the initial $2 million value) to ABC Charity for 20 years. At the end of the 20-year period, the entire trust principal will go outright to John’s children. Using IRS tables, the charity’s lead interest is valued at $1,267,630, and the remainder interest is valued at $732,370. Assuming the trust assets appreciate in value, John’s children will receive any amount in excess of the remainder interest ($732,370) unreduced by estate taxes.
A charitable remainder trust is the mirror image of the charitable lead trust. Trust income is payable to you, your family members, or other heirs for a period of years, and then the principal goes to your favorite charity.
A charitable remainder trust can be beneficial because it provides you with a stream of current income–a desirable feature if there won’t be enough income from other sources.
Example:Jane, an 80-year-old widow, creates and funds a charitable remainder trust with real estate currently valued at $1 million, and with a cost basis of $250,000. The trust provides that fixed quarterly payments be paid to her for 20 years. At the end of that period, the entire trust principal will go outright to her husband’s alma mater. Using IRS tables, Jane receives $50,000 each year, avoids capital gains tax on $750,000, and receives an immediate income tax charitable deduction of $1,138,384, which can be carried forward for five years. Further, Jane has removed $1 million, plus any future appreciation, from her gross estate.
A private family foundation is a separate legal entity that can endure for many generations after your death. You create the foundation, and then transfer assets to the foundation, which in turn makes grants to public charities. You and your descendants have complete control over which charities receive grants. But, unless you can contribute enough capital to generate funds for grants, the costs and complexities of a private foundation may not be worth it.
Tip:One rule of thumb is that you should be able to donate enough assets to generate at least $25,000 a year for grants.
Community foundation
If you want your dollars to be spent on improving the quality of life in a particular community, consider giving to a community foundation. Similar to a private foundation, a community foundation accepts donations from many sources, and is overseen by individuals familiar with the community’s particular needs, and professionals skilled at running a charitable organization.
Similar in some respects to a private foundation, a donor-advised fund offers an easier way for you to make a significant gift to charity over a long period of time. A donor-advised fund actually refers to an account that is held within a charitable organization. The charitable organization is a separate legal entity, but your account is not–it is merely a component of the charitable organization that holds the account. Once you transfer assets to the account, the charitable organization becomes the legal owner of the assets and has ultimate control over them. You can only advise–not direct–the charitable organization on how your contributions will be distributed to other charities
Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.
That’s where financial planning comes in. Financial planning is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.
Why is financial planning important?
A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.
One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related–for example, how saving for your children’s college education might impact your ability to save for retirement. Then you can use the information you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you’ll have the peace of mind that comes from knowing that your financial life is on track.
The financial planning process
Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:
Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
Establish and prioritize financial goals and time frames for achieving these goals
Implement strategies that address your current financial weaknesses and build on your financial strengths
Choose specific products and services that are tailored to meet your financial objectives
Monitor your plan, making adjustments as your goals, time frames, or circumstances change
Some members of the team
The financial planning process can involve a number of professionals.
Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas.
Accountants or tax attorneys provide advice on federal and state tax issues.
Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.
Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.
Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.
The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any recommendations, all decisions lie in your hands.
Why can’t I do it myself?
You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered.
Staying on track
The financial planning process doesn’t end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:
Your goals or time horizons change
You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss
You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
Your income or expenses substantially increase or decrease
