What Is a Financial Plan?
A financial plan is a document containing a person’s current money situation and long-term monetary goals, as well as strategies to achieve those goals. A financial plan begins with a thorough evaluation of the person’s current financial state and future expectations and may be created independently or with the help of a certified financial planner.
Special Considerations of a Financial Plan
Financial plans don’t have a set template. A licensed financial planner will be able to create one that fits you and your expectations. Once complete, it may prompt you to make changes in the short term that will help ensure a smooth transition through life’s financial phases.
Financial Market Investment Options
Forex Market
The foreign exchange market is the exchange of one country’s currency with that of another country. Investors use currency futures contract that allow them to buy or sell a currency at a future date, at a previously fixed price.
Stock Market
Stock exchanges are secondary markets where existing shareholders can transact with potential buyers. Companies list shares of their stock on a specific exchange which brings buyers and sellers together and acts as a market for the shares of those stocks.
Oil & Gas
The oil and gas market consists of sales of oil and gas by entities. The industry is usually divided into three sectors. Upstream, which is the business of exploration and production of oil and gas. Midstream, which consists of transportation and storage. Downstream, which includes refining and marketing.
Gold Market
The gold market is considered to be one of the safest investments since it’s supply is relatively constant. Gold is traded continuously throughout all time zones and its price is moved by a combination of supply, demand and investor behavior.
Retirement strategy
No matter what your priorities are, the plan should include a strategy for accumulating the retirement income that you need.
Comprehensive risk management plan
This includes a review of life and disability insurance, personal liability coverage, property and casualty coverage, and catastrophic coverage.
Long-term investment plan
A customized plan based on specific investment objectives and a personal risk tolerance profile.
- A financial plan documents an individual’s long-term financial goals and creates a strategy for achieving them.
- The plan should be comprehensive but also highly individualized, to reflect the individual’s personal and family situations, risk tolerance, and future expectations.
- The plan starts with a calculation of the person’s current net worth and cash flow and ends with a strategy.