HACE3200 Chapter One Notes

HACE3200 Chapter One Notes - HACE3200 Chapter One Notes I...

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HACE3200 Chapter One Notes I. Facing Financial Challenges ● Financial Planning help you use the money you do earn to achieve your financial goals ●This course helps you accomplish the following: 1). Manage the unplanned 2). Accumulate wealth for special expenses 3). Save for retirement 4). “Cover your assets” 5). Invest intelligently 6). Minimizer your payment to Uncle Sam II. The Personal Financial Planning Process Five steps to personal financial planning we should examine ● Step 1: Evaluate Your Financial Health(recording keeping process) ● Step 2: Define Your Financial Goals ● Step 3: Develop a plan of Action A solid personal financial plan includes an informed and controlled budget, determines your investment strategy, and reflects your unique personal goals. Common factors: Flexibility, liquidity, protection and minimization of taxes. 1). Flexibility: Your financial plan should be flexible enough to respond to changes in your life and unexpected events. 2). Liquidity: means the ability to get to your money when you need it 3). Protection: Insurance offers protection against the costliest unforeseen events. A good financial plan includes enough insurance to prevent financial ruin at reasonable rates. ● Step 4: Implement Your Plan You need to actually stick to your plan. Your financial plan is not the goal; it is the tool you use to achieve your goals. ● Step 5: Review Your Progress, Reevaluate, and Revise Your Plan As time passes and things change, you must review your programs and reexamine your plan.
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Figure 1.1 The Budgeting and Planning Process(P7) III. Establishing Your Financial Goals ● Financial goals cover three time horizons: 1) Short term(within 1 year), 2) intermediate term(1-10 years), and 3) long term(more than 10 years to accumulate the money). ● The Life Cycle of Financial Planning
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This note was uploaded on 01/30/2011 for the course HACE 3200 taught by Professor B during the Spring '09 term at UGA.

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HACE3200 Chapter One Notes - HACE3200 Chapter One Notes I...

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