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A Primer on Financial Planning

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  1. A Primer on Financial Planning Amin Rashid, CFP® Investment Advisor Representative www.aminrashid.com 535 Broadhollow Rd. Suite A-1A Melville NY 11747 631-270-7675 Fax 631-270-1517 Securities offered through Princor Financial Services Corporation. Investment Advisory Services offered through Princor's corporate Registered Investment Adviser (RIA), Des Moines, IA 50392-2028.(800)2474123, member FINRA/SIPC. Princor and Principal life are members of the Principal Financial Group. Disclosure: Recommendations pertaining to tax and other legal considerations are for information only. Therefore, you should consult with your own personal attorney or accountant for this advice. Additionally, together with your advisors, you should carefully consider each recommendation in light of your particular situation before deciding on a specific course of action.

  2. What is Financial Planning? • Financial planning is a strategic road map that helps an individual to establish a realistic and achievable financial goal • Financial plan is composed of many elements, which inter-relate in a dynamic way as you progress through the various stages of your life

  3. Rationale and Need for Financial Planning • Developing and maintaining a personal financial plan is essential for you in achieving financial security • Assess your true net worth • Identify and prioritize your personal and financial needs and goals • Evaluate the level of risk that you are willing to take with your investments - estimate your ‘risk tolerance’ and develop an asset allocation strategy • Develop a financial plan that is right for you

  4. Rationale and Need for Financial Planning • Facilitate your interactions with other financial professionals - Stockbrokers/FA, Money Managers, Insurance Brokers, Accountants, Lawyers, etc. • Help savings for major expenses - funding a child's education, buying a house or car, or developing a cash reserve for special occasions like weddings and vacations • Prepare you for retirement by estimating retirement income and expenses and the value of government programs - determine the amount you need to save to help meet those retirement goals

  5. Rationale and Need for Financial Planning • Identify the steps to reduce taxes, project the effect of federal income taxes, and develop a tax-deferred strategy • Protect you and your family against financial crisis should you become disabled or die prematurely • Preserve estate and ensure your assets are distributed the way desired, fund estate taxes, and minimize their effects where possible • Plan charitable gifts Disclosure: Recommendations pertaining to tax and other legal considerations are for information only. Neither National Asset Management, Inc. (NAM) nor any of its agents, representatives, or employees provides any legal, tax, or accounting advice. Therefore, you should consult with your own personal attorney or accountant for this advice. Additionally, together with your advisors, you should carefully consider each recommendation in light of your particular situation before deciding on a specific course of action.

  6. Common Misconception With Regards To Financial Planning(Source: Certified Financial Planner Board of Standards) • Do not have measurable financial goals • Make financial decisions without understanding their effects on other financial issues • Neglect to re-evaluate their financial plan periodically • Look for a quick financial fix instead of a long-term strategy • Expect unrealistic returns on investments • Think that financial planning is only for the wealthy • Think that financial planning is only necessary when they get older • Think that financial planning is primarily tax planning • Wait until a money crisis occurs to begin financial planning • Think that using a financial planner means losing control

  7. Different Aspects of Planning A. Cash Management: • Preparing cash flow statement • Preparing balance sheet • Budgeting • Help allocate emergency fund • Saving • Buying/Leasing Decision

  8. Cash Management: • Cash Flow Management takes into account all lifestyle expenses, all sources of income, taxes, wealth accumulation strategies, and the effects of inflation

  9. B. Investment Strategies: • Needs analysis • Risk assessments • Asset allocation • Investment selection • Portfolio Developments and management • Monitoring Risk

  10. C. Income Tax Planning: • Minimizing tax consequence • Lifetime Learning Credit • Charitable Contributions • Tax-Deferred Investing Disclosure: Recommendations pertaining to tax and other legal considerations are for information only. Therefore, you should consult with your own personal attorney or accountant for this advice. Additionally, together with your advisors, you should carefully consider each recommendation in light of your particular situation before deciding on a specific course of action.

  11. D. Insurance Considerations: • Risk management through the use of insurance • Risk retention and risk transfer decisions • Analyze insurance adequacy for life, health and property casualty

  12. E. Retirement Planning: • Setting retirement goals • Maximizing retirement funding • Plan Selection • Post retirement asset utilization plan

  13. F. Estate Planning: • Designing efficient means to pass on wealth to successors. • Business succession plan • Help update wills, living trust durable/medical power of attorney • Maximize gift and estate consequences • Help avoid costly and time consuming probate process Disclosure: Recommendations pertaining to tax and other legal considerations are for information only. Therefore, you should consult with your own personal attorney or accountant for this advice. Additionally, together with your advisors, you should carefully consider each recommendation in light of your particular situation before deciding on a specific course of action.

  14. Financial Planning is a Six-step Process • Step 1:Establish the client-planner engagement • Step 2: Gather client data and determine clients goals and expectations • Step 3: Clarify clients present financial status and identify any problem areas and opportunities • Step 4: Develop and share the financial plan • Step 5: Implement the financial plan • Step 6: Monitor the financial plan

  15. Benefits of Financial Planning • A comprehensive financial plan provides a snap shot of a clients’ current financial situation, prioritizes his/her goals and identifies necessary resources to get there • It gives the client a game plan • Acts as a compass to check if you are on right course • It is a check and balance instrument • It puts all financial concerns in perspective and allow you to focus on the big Picture

  16. Conclusion All great achievements start with a good plan……..