RealTown's RealTalk

About 14 years ago I created a 100 page manuscript on the topic of personal financial planning and began to teach a two day program with the goal of helping the attendees create the framework of a personal financial plan and a check list to complete and implement it. The following is from that manuscript. Make 2008 your year to put your personal financial plan in place.

Financial Freedom by Saul Klein

Achieving Financial Freedom requires consistent review of one’s goals, objectives and priorities, and commitment to the accomplishment of those goals and objectives based on those priorities.

Defining your goals and objectives can be a difficult task. But doing so is critical. Without clearly defined goals, successful financial planning, and

the result of successful financial planning, Financial Freedom, is rarely possible.

General Personal and Financial Objectives:

Enhancing your net worth through financial strategies which are congruent with your personal goals and consistent with your attitudes toward investing and tolerance for risk.

 ·         Protecting your accumulated assets from erosion caused by inflation.

·         Optimizing your cash flow over the planning period.

·         Preventing loss of capital by minimizing risk.

·         To maintain a comfortable standard of living (or exceptional standard of living) for yourself and family.

·         Achieving a better understanding of individual financial planning.

·         Maintaining sufficient liquidity to respond to unforeseen emergencies, or opportunities.

·         Coordinating and effectively manage your financial affairs.

Cash Management Objectives:

 ·         Increase funds available for investment and lifestyle through more effective cash management.

·         Simplify your system of managing your cash.

·         Maximize the return on your cash accounts.

Tax Planning Objectives

·         Reduce your personal income tax liability.

·         Understand the remaining few tax-advantaged investments.

·         Manage your tax records more effectively.

Investment Management Objectives:

·         Optimize the return on your invested capital consistent with your tolerance for risk.

·         Establish a balanced, diversified investment portfolio.

·         Understand the use of leverage and determine your appropriate level of debt.

Risk Management Objectives:

Evaluate the appropriateness and cost effectiveness of your current insurance coverage Life

·         Disability

·         Casualty

·         Medical)

·         Business

·         Errors and Omission

Specific Funding Objectives:

·         Accumulate adequate assets to provide you and your family a comfortable retirement, without disabling loss of purchasing power during your "golden years".

·         Provide funds for a quality education for your children.

Estate Planning Objectives:

·         Minimize estate and inheritance tax.

·         Allow for the orderly and efficient distribution of your assets in accordance with your wishes.

·         Reduce the burden of estate management for your heirs.

Although these are separate and distinct objectives, they are not mutually exclusive. By viewing all areas of your finances as a comprehensive whole, taking into account all the interrelationships among all the financial issues you face, you control the financial events in your life rather than the other way around.

Financial Planning is:

·         Bringing the future into the present so you can do something about it today

·         A philosophy

·         A state of mind

·         It is not a destination, it is a road. (The road to success is always under construction)

·         It is a continuous effort of research, education, and self-motivation.

·         It is continuously reviewing objectives, weighing alternatives, and making choices.

Saul

Saul Klein e-PRO/GRI

Certified Financial Planner (CFP)

President/CEO, InternetCrusade

1993 President, San Diego Association of REALTORS

1999 REALTOR of the Year

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(619) 283-7302 Fax: (619) 283-7343 MailTo:Saul@InternetCrusade.com