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Plan Your Financial Future: A Comprehensive Guidebook to Growing Your Net Worth

Book Description

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.

What you'll learn

Readers of Plan Your Financial Future will learn:

  • How to take advantage of benefits that are offered to them by their employer

  • The importance of minimizing the effects of inflation on their portfolios as much as possible

  • Financial strategies for preparing for their children's higher education

  • Rock-solid advice for planning for the financial aspects of their retirement years

  • Whether or not they would benefit from the hiring of a professional financial planner

  • How to create and maintain a personal financial plan that protects them and their families into the future

Who this book is for

Plan Your Financial Future is designed for readers of all income levels who would like grow their net worth on a steady and increasing basis by implementing and sticking to a personal financial plan. Everyone from recent college graduates to those who have been in the working world for many years will benefit from the insightful, actionable advice offered up in Plan Your Financial Future.

Table of Contents

  1. Title Page
  2. Apress Business: The Unbiased Source of Business Information
  3. Dedication
  4. Contents
  5. Foreword
  6. About the Author
  7. Acknowledgments
  8. PART I: The Financial Planning Process
    1. CHAPTER 1: Understanding the Challenge: The Need to Begin
      1. Wealth and the PADD Approach
      2. The Steps in the Financial Planning Process
      3. Determine Where You Are Now
      4. Cash Flow and Debt Management
      5. Monitor Your Progress and Life-Cycle Planning
    2. CHAPTER 2: Do You Need a Financial Planner?
      1. A Word About Self-Help
      2. Types of Financial Planners
      3. The Certified Financial Planner Professional and Other Financial Planning Designations
      4. Questions to Ask a Financial Planner
    3. CHAPTER 3: Elements of Personal Financial Planning and the Wealth Management Process
      1. Personal Financial Planning and Wealth Management
      2. The Need for an Investment Policy Statement
      3. The Basics of a Diversified Portfolio
      4. The Basics of Rebalancing
      5. Investment Strategies
  9. PART II: Protecting Yourself, Your Family, and Your Property
    1. CHAPTER 4: Insuring Yourself and Your Family
      1. Do I Need Life Insurance? How Much?
      2. Term versus Cash Value Insurance
      3. Insurance Company Selection and Ratings
    2. CHAPTER 5: Insuring Your Health and Long-term Care
      1. Considerations in Selecting a Health Insurance Policy
      2. Patient Protection and Affordable Care Act of 2010
      3. Types of Health Insurance Policies
      4. Continuation of Health Insurance Coverage After You Have Left Your Job
      5. Portability of Health Insurance Coverage
      6. Medicare and Medigap
      7. The Importance of Long-Term Care Insurance in Protecting Your Wealth
      8. Alternatives to Long-Term Care Insurance
    3. CHAPTER 6: Insuring Your Earning Power
      1. Is the Loss of Your Earning Power Already Adequately Covered?
      2. Definitions of Disability
      3. Additional Important Provisions in an Individual Disability Policy
      4. Policy Continuation Provisions
      5. Additional Policy Benefits to Consider
      6. Policy Exclusions
      7. Questions to Ask Before Purchasing an Individual Disability Income Policy
    4. CHAPTER 7: Insuring Your Property
      1. What to Consider When Insuring Your Home
      2. Types of Homeowner’s Policies (and the One You Want)
      3. What to Consider When Insuring Your Automobile
      4. No-Fault Insurance
      5. Umbrella Liability Insurance
      6. Business Property Insurance
    5. CHAPTER 8: Optimizing Your Employment Benefits
      1. Group Medical and Dental Insurance
      2. Group Life Insurance
      3. Group Disability Insurance
      4. Group Long-Term Care Insurance
      5. Dependent Care Assistance
      6. Employer Educational Assistance
      7. Saving for Retirement through Employer-Sponsored Plans
      8. Company Stock Purchase Plans
      9. Stock Options and Other Forms of Incentive Compensation
  10. PART III: Accumulating Wealth
    1. CHAPTER 9: Investing in Financial Assets
      1. Cash Investments and When to Use Them
      2. Bonds and When to Use Them
      3. Stocks and When to Use Them
      4. Mutual Funds and When to Use Them
      5. International Investing
    2. CHAPTER 10: Investing in Real Assets
      1. Direct Investments in Real Estate
      2. Indirect Investments in Real Estate
      3. The Use of Leverage in Real-Estate Investing
      4. Correlation
      5. Financial or Real Assets: Which Are Better?
    3. CHAPTER 11: Investing in Use Assets
      1. Your Home as an Investment
      2. Buying versus Renting a Home
      3. Selling Your Home
      4. Automobiles: Do You Really Need That New Lamborghini?
      5. Tangible Personal Property and Collectibles
  11. PART IV: Defending Wealth
    1. CHAPTER 12: Income Tax Planning and Management
      1. Basics of Income Tax Rates, Withholding, and Estimated Taxes
      2. Social Security and Medicare Taxes (FICA)
      3. Regular Income Tax vs. Individual Alternative Minimum Tax (AMT)
      4. Basic Tax Planning Technique #1: Tax Avoidance
      5. Tax Avoidance vs. Tax Evasion
      6. Basic Tax Planning Technique #2: Tax Deferral
      7. Basic Tax Planning Technique #3: The Conversion of Income
      8. Tax-Smart Investing
      9. What You Can Learn From Your Own Tax Return
    2. CHAPTER 13: Transfer Tax Planning and Management
      1. The Advantages of Lifetime Gifting
      2. Gifts to Minors
      3. A Basic Primer on the Use of Trusts
      4. Components and Valuation of the Gross Estate
      5. Deductions and Credits Available to the Estate
      6. Tax Rates and the Possible Repeal of the Death Tax
      7. Do I Really Want to Leave It All to My Spouse or Charity?
      8. The Unintended Danger of Generation-Skipping Transfers
    3. CHAPTER 14: Life Events that Endanger Wealth
      1. Divorce
      2. Loss of Employment
      3. Death of a Spouse or Life Partner
      4. Dependent Parents
      5. A Developmentally Disabled Child
      6. Your Own Physical or Mental Incapacity
  12. PART V: Distributing Wealth During Your Lifetime
    1. CHAPTER 15: Planning for Your Child’s Higher Education
      1. How Much Will I Need?
      2. In Whose Name Do I Save?
      3. How Do I Save?
      4. Tax Deductions and Credits Available for Paying for the Cost of College
      5. The Tax-Coordination Rules: Why Can’t I Do That?
      6. Using a Roth IRA in College Funding
    2. CHAPTER 16: Planning for the Financial Aspects of Retirement
      1. How Much Will I Need?
      2. Other Questions to Ask When Planning for Retirement
      3. The Financial Risks of Retirement
      4. The “Three-Legged Stool” of Retirement Savings
      5. When Should I Elect to Begin Receiving Social Security Retirement Benefits?
      6. Understanding Distribution Options from an Employer-Sponsored Retirement Plan
      7. Required Minimum Distributions
      8. IRA Rollovers and Conversions
      9. The Use of Annuities in Retirement Planning
      10. How Much Should I Withdraw Annually During Retirement?
    3. CHAPTER 17: Planning for the Lifestyle Needs of Retirement
      1. Housing Options for Retirees
      2. Using Your Home to Fund Retirement: Reverse Mortgages
      3. Do I Need Life Insurance During Retirement?
      4. Retiree Health Insurance
      5. Medicare and Medicare Supplemental Insurance (Medigap)
      6. So, I am Retired! Now What?
    4. CHAPTER 18: Planning for Other Lifetime Financial Goals
      1. Starting Your Own Business
      2. Buying a Personal Residence
      3. Purchasing and Using a Vacation Home
      4. Investing a Windfall: So You Won the Lottery!
  13. PART VI: Distributing Wealth at Death
    1. CHAPTER 19: Estate Planning
      1. Do I Need a Will?
      2. Leaving Property via Beneficiary Designations
      3. Titling Property
      4. Should I Avoid the Probate Process at Death?
      5. Estate Taxes
      6. The Importance of Durable Powers of Attorney
      7. Living Wills
      8. Personal Letter of Instructions
      9. When Should I Change My Estate Plan?
    2. CHAPTER 20: Philanthropy
      1. Choosing a Charity to Benefit
      2. Gifts to Charity Using Trusts and Annuities
      3. Hail, Hail to Your Dear Old Alma Mater
      4. Private Foundations
      5. Donor-Advised Funds
  14. PART VII: Summarizing the Personal Financial Planning Process
    1. CHAPTER 21: Reaping the Rewards
    2. APPENDIX A: Sample Data-Gathering Form
    3. APPENDIX B: Sample Budget
    4. APPENDIX C: Power of Attorney
    5. APPENDIX D: Declaration as to Medical or Surgical Treatment and Medical Durable Power of Attorney
    6. APPENDIX E: Sample Personal Letter of Instruction
    7. Glossary
  15. Index