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Personal Finance Planning System: What Factors Need To Be Considered
But these questions have been snatched out of the system. Any answer to them without a complete analysis of the person's financial situation will be incorrect.
the leading financial consultant of our SMSF accountants Melbourne will tell you about what is included in the personal finance planning system, what factors affect it and what needs to be taken into account when drawing up a personal financial plan. ⠀
So, let's take a big look at what is included in the personal finance planning system.
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Analysis of sources of existing income, and opportunities to increase them. Both in terms of the number of sources and the amount of money coming from them.
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Cost accounting and analysis of opportunities to reduce them. Moving from accounting to budget planning.
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Analysis of existing family assets and liabilities. Very often we forget about an empty garage that can be sold or rented out, or about any debt to relatives or friends. And all this must be counted.
Analysis of the existing delta between income and expenses. ...
... It is this figure that allows us to calculate the speed of creating a financial airbag, the time and size of the initial investment and select the tools with which we will achieve our goals.
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Finding financial protection for the family - these are the tools that allow you to save everything previously created in the event of force majeure.
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A clear statement of all financial goals until the end of life and the selection of investment instruments to achieve them.
Working with your fears, beliefs and feelings about money. As it is now fashionable to say - with your money thinking. But this is not only about thoughts, but also about feelings.
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Well, scared you? Seems like so much? Yes, at first glance, a lot.
But when you start doing, everything is built into a coherent and understandable system, the work with which later takes 1-2 hours a year.
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And I recommend working systematically.SMSF Audit Services The loss of at least one element leads to the fact that you will not achieve your goals, and so you will continue to be afraid of every crisis.
Factors influencing financial planning, and what needs to be considered when drawing up a personal financial plan.
This will not be a closed list, since there are a lot of personal nuances and shades, and each family is unique. smsf accountant But I will try to reflect the basic factors, so to speak, to understand the logic of the process.
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All these factors affect the selection of both investment instruments and financial protection instruments (those that allow not to lose all accumulated assets and capital in the event of force majeure situations).
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So, these are the factors:
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1. Family composition: The
number of people and their age. How many people bring money to the family. How many dependents.
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2. Number of sources of money in the family:
Salaries. Bonuses. Alimony. Tax refunds. Privileges. Passive investment income. Hobby income. Partnership programs. Rental income.
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3. Duration of sources of income.
For example: alimony that ends with the majority of children or short investment programs.
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4. Availability of assets generating / not generating income.
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5. Does the spouse have children from previous marriages.
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6. Financial goals of the family. How much are. The term of their achievement.
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7. Availability of debts and loans: their size and maturity.
8. Opportunities to increase active income. Active income is when you sell your time for money.
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9. Availability of insurance: life (risk and savings), health, property.
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10.You plan to change your car regularly. Or maybe taxi and car sharing are yours. And even the opportunity to ride in different cars.
You want your own home, or it is better to receive passive income from these amounts and change your place of residence every year.
Your spouse is the only breadwinner of the family, and not only yours, but also your parent's. You are employed or have a business with a partner who is your only source of income.
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All these nuances have an impact on your financial success now and in the future. And any of them can both help and hinder your achievement of financial independence and freedom.
Consider all the factors and nuances when planning finance and managing capital, and success will be guaranteed!
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