Personal Financial Plan

Personal Financial Plan - * Traditional: before-tax money *...

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* Personal Financial Plan: Apply a Five Step Planning  Process * See Next Slide… * Money and Happiness * Five Personal Finance “Buckets” * Emergency Fund * Retirement * Real Estate * Risk Management * War Chest * Emergency Fund * First Priority for Money * Goal:  3-6 Months of  Expenses * “Naked” Account * Capital Preservation/Conservative Investment * Note:  Naked account can also include the funds for  short-term war chest items like college tuition or down  payment on home.  * Retirement Accounts * Contribute $ amount or % of salary required to get  401k match from employer for “Free Money.” * Dollar Cost Averaging * Individual Retirement Account (IRA): * Roth:  after-tax money
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Unformatted text preview: * Traditional: before-tax money * Yearly contribution limit ($5000 in 2011); can be a combo * Goal to invest as much as possible in a Roth IRA unless income level phases out this option. * Real Estate * The Real Estate Bucket comes from owning your own home. * To avoid overweighting portfolio to Real Estate you must weigh the decision to invest in additional property carefully. * However, owning rental properties can be profitable (albeit illiquid). * Ownership of rental property increases your responsibility in the role of landlord....
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Personal Financial Plan - * Traditional: before-tax money *...

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