nach oben

2013 | Buch

Kapitel lesen Erstes Kapitel lesen

Plan Your Financial Future

A Comprehensive Guidebook to Growing Your Net Worth

verfasst von: Keith R. Fevurly

Verlag: Apress

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Einloggen, um Zugang zu erhalten

Über dieses Buch

Implementing a financial plan to manage the future is very important. If you have not assembled such a plan, or even if you have not thought about how best to manage your financial future, the time to do so is now, and the resource you need to walk you through every step of the personal financial planning process is Plan Your Financial Future. Regardless of whether you are a recent college graduate or have spent the past several decades in the working world, Plan Your Financial Future will give you the smart, commonsense advice you need to get your financial life in order.

Written by an expert and long-standing educator in the field of personal financial planning, Plan Your Financial Future is a comprehensive, objective, and pertinent guidebook for readers of all income levels who want to grow their net worth on a steady and increasing basis. Covering all the financial bases you can reasonably expect to confront in your lifetime, like insurance, investing, income tax planning, Social Security, Medicare, and more, this vital resource begins with techniques to protect a consumer's personal and business assets. It then transitions into the wealth accumulation process and outlines tax management measures, as well as the distribution of wealth for higher education, retirement, and estate planning purposes.

Filled with in-depth insight and invaluable financial planning advice, this unique guide explains how to:

Insure yourself, your family, and your property against the possibility of significant loss; Invest in financial or real assets—or both; Practice effective tax planning and management techniques; Distribute your estate at death to your intended beneficiaries in a tax-efficient manner; And much more.

With its no-nonsense, straightforward style and holistic view of the financial planning process, Plan Your Financial Future is the one resource you need to become a more knowledgeable saver and translate those savings into the accumulation of future wealth.

Inhaltsverzeichnis

Frontmatter

The Financial Planning Process

Frontmatter

Chapter 1. Understanding the Challenge: The Need to Begin

Abstract

You need to understand one thing up front: this is not a book about how to get rich quickly (although if you follow the advice given in these pages, you may very well become rich). Rather, this is a book about slowly and consistently becoming wealthy.

Keith R. Fevurly

Chapter 2. Do You Need a Financial Planner?

Abstract

Now that you know about the basics of the financial planning process, do you think you can do it yourself? Only you can answer that question, but here are several important factors to consider as you attempt to do so:

Keith R. Fevurly

Elements of Personal Financial Planning and the Wealth Management Process

Abstract

Academic studies have shown that following a financial plan will help you build wealth more rapidly than is possible without one. This is because a financial plan enforces self-discipline, the key to any future accumulation of wealth. People earning between $20,000 and $100,000 per year who follow a financial plan typically have up to twice as much savings as those in the same income bracket who have no financial plan. For those earning more than $100,000 per year and following a financial plan, the savings rate is some 60 percent greater than that of their peers. Clearly, people who adhere to some form of a financial plan—either in writing or informally by matching their savings practice to a predetermined set of financial goals—have a significant advantage. Bottom line: you have to convince yourself of reasons to save, or you will probably not do it. One of the purposes of this book is to provide you with those reasons.

Keith R. Fevurly

Protecting Yourself, Your Family, and Your Property

Frontmatter

Insuring Yourself and Your Family

Abstract

This section of this book introduces the first step in the PADD approach to accumulating and managing wealth: protecting yourself against the risk of catastrophic financial loss. In this chapter, we discuss the most important form of risk management: insuring your life (and protecting your loved ones from the resulting loss of income at death) by purchasing life insurance.

Keith R. Fevurly

Chapter 5. Insuring Your Health and Long-term Care

Abstract

The issues of health insurance and health insurance coverage are controversial and politically charged, particularly given individual preferences about national health insurance versus a private-payer system. The potential necessity for long-term care insurance, however, is not nearly as well known or discussed. According to the U.S. Department of Health and Human Services, individuals reaching the age of 65 have an approximately 40 percent chance of entering a nursing home and requiring chronic, custodial care. Candidates for long-term care suffer from chronic or disabling conditions that require nursing home care or other constant supervision. The cost of this care can be expensive—even catastrophic—for many individuals and their families.

Keith R. Fevurly

Insuring Your Earning Power

Abstract

Ask any financial planner or insurance agent what the most neglected or underinsured financial risk is, and they are likely to say the risk of losing your ability to earn a living. Most individuals simply do not give sufficient attention to this possibility and, if they do, believe that they are adequately covered. In other words, they believe they will never lose their earning power. However, according to the Commissioner’s Individual Disability Table A, one in three working Americans will suffer some form of disability that lasts at least 90 days before they reach the age of 65. In addition, one in seven employees will be disabled for five or more years prior to their retirement. You are two to three times more likely to become disabled during your working career than you are to die during this same period. These are impressive (and somewhat frightening) numbers.

Keith R. Fevurly

Chapter 7. Insuring Your Property

Abstract

Typically, an individual’s most important possessions are their home and automobile. Now that you have learned how to insure your life, health, and earning power, you want to be sure that your home(s) and automobile(s) are protected against significant financial loss as well.

Keith R. Fevurly

Optimizing Your Employment Benefits

Abstract

Our discussion on how to protect your wealth concludes with this chapter on how best to take advantage of benefits offered by your employer. Unlike the humorous television commercial, benefits offered by your employer do not come from France (“French benefits”) but rather are commonly referred to as fringe benefits. The nature and amount of fringe benefits you receive from your workplace depends on your employer, its current and future cash flow, and its attitude toward providing (usually) tax-free benefits to its employees. Typically, employers offer fringe benefits not only for competitive reasons, but also because they receive an income-tax deduction for doing so, which thereby assists them with the management of their future cash flow.

Keith R. Fevurly

Accumulating Wealth

Frontmatter

Chapter 9. Investing in Financial Assets

Abstract

There are two basic categories of investment assets: financial assets and real assets. For the purposes of this chapter, however, we will be discussing what most people think of when the term investment is mentioned: financial assets, such as stocks and bonds denominated and traded in U.S. dollars. To be properly diversified in financial assets, many financial planners recommend some exposure to foreign markets or assets denominated and traded in local (non-U.S. dollar) currencies in addition to maintaining holdings in more traditional investments. But unless investors invest in an American Depository Receipt (ADR) of foreign stock, they need to understand that there is a currency or exchange risk when converting the proceeds from a foreign stock into U.S. dollars. This is in addition to other systematic risks that are assumed when accumulating wealth via financial assets.

Keith R. Fevurly

Investing in Real Assets

Abstract

Most individuals own real estate; in fact, approximately 65 percent of Americans own their own home as of the year 2012. In addition, according to the U.S. Census Bureau, in 2000, 32.3 percent of the typical American’s net worth consisted of the equity in their home. Although this percentage decreased considerably with the real-estate bust that began in the summer of 2007 in most areas of this country, it remains true that home ownership is an integral part of both the American Dream and the wealth-accumulation process.

Keith R. Fevurly

Investing in Use Assets

Abstract

If you think back in the financial planning process to when you first prepared your personal financial statement, you will notice that your home and automobile were properly listed as use assets and not as investments. Although a profit motive may attach to some use assets (particularly luxury automobiles or antique collectibles), generally such assets are purchased so you can make efficient and enjoyable use of them.

Keith R. Fevurly

Defending Wealth

Frontmatter

Chapter 12. Income Tax Planning and Management

Abstract

Now that we have discussed how to use the PADD process to protect and accumulate your wealth, we move on to the defense or preservation of that wealth. Specifically, Chapter 12 focuses on income tax planning and management, with subsequent chapters addressing transfer tax (gift and estate tax) planning and life events that threaten wealth, such as divorce or loss of a job.

Keith R. Fevurly

Chapter 13. Transfer Tax Planning and Management

Abstract

Once an individual has accumulated wealth, their motivations in the financial planning process turn to not only how to protect or defend this wealth, but also how to distribute it. For this reason, this chapter explains gifts and the advantages of making gifts in transfer-tax planning and management. Many individuals think that transfer tax (gift and estate tax) planning is only relevant for very high-net-worth taxpayers, but this is not really true. For example, did you know that you can give away $14,000 per year, regardless of the amount of your net worth, to donees without having to file a federal gift tax return, IRS Form 709? Just as important, did you know that once you exceed this $14,000 limit, you are required by law to file a federal gift tax return? Yes, you will also have to include Christmas gifts on that tax return if you have given away the full $14,000 limit earlier in the same year.

Keith R. Fevurly

Chapter 14. Life Events that Endanger Wealth

Abstract

As you go through life, you sometimes experience events that endanger or threaten the amount of wealth that you have accumulated. We have already discussed the importance of obtaining an individual disability income policy in the event of physical disability, and we will discuss how to plan for your own possible mental incapacity later in this chapter. Specifically, however, we identify important planning considerations with respect to six potentially financially devastating life events, including divorce, the loss of a job for an extended period of time, the death of a spouse or life partner, a parent incurring a debilitating condition, caring for a developmentally disabled child, and physical or mental incapacity.

Keith R. Fevurly

Distributing Wealth During Your Lifetime

Frontmatter

Chapter 15. Planning for Your Child’s Higher Education

Abstract

We now move to the last step in the PADD process of wealth accumulation and management: distributing your wealth. Toward that end, this section of the book focuses on the distribution of wealth during your lifetime and considers the common financial goals of saving and planning for your child’s higher education and your own retirement. It also discusses how to save and plan for other lifetime financial goals you may have, such as starting your own business. Then, the last section of the book takes up the process of distributing your wealth at death.

Keith R. Fevurly

Chapter 16. Planning for the Financial Aspects of Retirement

Abstract

There are many opinions as to when it is best to start planning for your retirement, but the best strategy is to do so as soon as possible. As part of the PADD process, recognize that accumulating sufficient funds to retire comfortably should be your number-one financial goal. If you are married with children at the time of your planned retirement, having sufficient retirement funds will help you avoid becoming a burden to your family, and, as a result, will make your retirement years that much more enjoyable. Adequate retirement monies will also prevent you from becoming overly dependent on the Social Security system, which is heading for financial difficulty absent Congressional action.

Keith R. Fevurly

Chapter 17. Planning for the Lifestyle Needs of Retirement

Abstract

Now that you have decided how you will finance your retirement, you need to consider where you will live and what you will do during your retirement. For many retirees, the choice of where to live is actually fairly simple: they continue living in the home they purchased prior to retirement. But there are many choices to make regarding where you will live, including what type of facility you will live in, as discussed shortly. What you will do in your retirement, however, is more complicated.

Keith R. Fevurly

Chapter 18. Planning for Other Lifetime Financial Goals

Abstract

Although most people’s number-one financial goal is planning for a comfortable retirement, you may have other financial goals that you wish to include in your wealth-distribution process. Among these may be starting your own business (and perhaps subsequently selling that business), buying and selling a personal residence, purchasing a second or vacation home, or investing a windfall, such as lottery winnings or a substantial inheritance. This chapter considers all these goals in turn and, to the extent possible (you cannot really plan to win the lottery), discusses how to achieve their attainment.

Keith R. Fevurly

Distributing Wealth at Death

Frontmatter

Chapter 19. Estate Planning

Abstract

We have now reached the last stage in a person’s financial life (and physical life, for that matter): death. In this chapter, we discuss how to distribute wealth to your spouse, family members, or other specified individuals or charities when you die. Estate planning and the distribution of an individual’s assets at death may best be thought of as the second component in the last step of the PADD process: distributing your lifetime accumulation of wealth at death so as to benefit others.

Keith R. Fevurly

Chapter 20. Philanthropy

Abstract

We conclude our look at wealth accumulation and management by considering a common financial-planning goal of many individuals, particularly married couples without children or those who are unmarried: benefitting, either at death or during their lifetime, the charity of their choice.

Keith R. Fevurly

Summarizing the Personal Financial Planning Process

Frontmatter

Chapter 21. Reaping the Rewards

Abstract

This book has introduced you to a new method of ordering your financial life and planning for your financial future. It has also developed a novel definition of the term wealth—a definition that goes beyond the traditional meaning of accumulating enough financial riches to ensure that your current or desired standard of living is maintained throughout your working years and subsequent retirement.

Keith R. Fevurly

APPENDIX A. Sample Data-Gathering Form

Abstract

Sample Data-Gathering Form

Keith R. Fevurly

APPENDIX B. Sample Budget

Abstract

Sample Budget

Keith R. Fevurly

APPENDIX C. Power of Attorney

Abstract

Power of Attorney

Keith R. Fevurly

APPENDIX D. Declaration as to Medical or Surgical Treatment and Medical Durable Power of Attorney

Abstract

Declaration as to Medical or Surgical Treatment and Medical Durable Power of Attorney

Keith R. Fevurly

APPENDIX E. Sample Personal Letter of Instruction

Abstract

Sample Personal Letter of Instruction

Keith R. Fevurly

Glossary. Glossary

Abstract

Glossary

Keith R. Fevurly

Backmatter

Titel: Plan Your Financial Future
verfasst von: Keith R. Fevurly
Verlag: Apress
Electronic ISBN: 978-1-4302-6065-3
Print ISBN: 978-1-4302-6064-6
DOI: https://doi.org/10.1007/978-1-4302-6065-3