The world of finance can be confusing to an “outsider,” especially when it comes to understanding the lingo. The technical jargon can be so overwhelming that it pushes people to give up trying to understand the basics, which can lead to procrastination and poor decision-making.
If you are feeling overwhelmed or confused by it all, here are 6 key aspects that can jumpstart your journey to financial literacy.
1. Basics of Financial Planning
Mastering financial, economic, and cash flow/debt management concepts is a great first step. Ask yourself: What do I own? How do I own it? What do I earn? What do I owe? By answering these simple questions, you are starting to build an understanding of your financial status.
2. Investment Planning
Investment planning is all about making your money work for you. Work with a trusted advisor who can help you build a diversified portfolio, manage your risks, and include a variety of investment vehicles.
3. Retirement Savings and Income Planning
Setting money aside today—delayed gratification—will allow you to have more choices in the future. A well-performing retirement fund needs consistent analysis, an evaluation of plans, and an understanding of Social Security, Medicare, and Medicaid.
4. Tax and Estate Planning
Understanding laws and management techniques related to taxes, property transfer, and estate planning can help you accomplish current and future financial goals.
5. Risk Management & Insurance Planning
Evaluating risk and assessing different types of insurance can help you protect your family, decreasing your anxiety about what may happen in the future.
6. Psychology of Financial Planning
When making financial decisions, never underestimate the power of fear and greed. Assess your feelings and behavior, then adjust accordingly.
How can MAI advisors help you understand this process more completely?
- A financial advisor can help you develop a clear picture of your current financial status by reviewing income, assets, and liabilities and by evaluating your insurance coverage, investment portfolio, tax exposure, and estate plan.
- Our advisors work with clients to establish individualized, prioritized financial goals and time frames for achieving them.
- We implement strategies that address current financial weaknesses and build on strengths.
- We can utilize solutions and services that are tailored to help you meet your goals.
- MAI advisors monitor your plan and make necessary adjustments as goals, time frames, and circ*mstances change.
Authored by Mark Van Drunen, CFP®, Regional President and Managing Director, MAI Capital Management | Information updated as of 03.28.2023.
Please send your questions, comments, and feedback to: [email protected]. The opinions and analyses expressed herein are subject to change at any time. Any suggestions contained herein are general, and do not take into account an individual’s or entity’s specific circ*mstances or applicable governing law, which may vary from jurisdiction to jurisdiction and be subject to change. Distribution hereof does not constitute legal, tax, accounting, investment or other professional advice. Recipients should consult their professional advisors prior to acting on the information set forth herein. In accordance with certain Treasury Regulations, we inform you that any federal tax conclusions set forth in this communication, were not intended or written to be used, and cannot be used by any taxpayer, for the purposes of avoiding penalties that may be imposed by the Internal Revenue Service.
