FINANCIAL PLANNING || ALL ACCURATELY ANSWERED.

FINANCIAL PLANNING || ALL ACCURATELY ANSWERED.


financial planning correct answers helps to enhance financial well being


personal finance correct answers aspects that affects your financial situation and the process of
planning your spending/savings


financial planning process correct answers EGADIM
1.establish and define a client planner relationship
2. gather data
3. analyze data
4. develop plan and make recommendations
5. implement plan
6. monitor plan


SMART goals correct answers specific- when, what, where, how aspects of the goal
measurable- attain quantifiable standards for achieving the goal
attainable- be realistic about achieving the goal
relevant- develop the goals that are crucial to financial situation
timely- create a goal that can be reached in a reasonable amount of time


financial knowledge correct answers ability to understand personal finance information
- you will notice that your current perceptions about finances will change
- possessing awareness of important information needed to understand and apply personal
finance conscepts


financial well being correct answers confidence and peace of mind about your financial situation
-security

,-no stress
-stability
-flexibility


financial risk tolerance correct answers your willingness to engage in financial endeavors that
have uncertain outcome
-some are natural risk takers
-some avoid risks
-some are in the middle and will take risks when they believe the rewards are high enough


human capital correct answers ones ability and willingness to work, learn, earn, and make wise
decisions about how to save and invest money
- your most valuable asset
- ones earnings are an indicator of your human capital in the labor market
- a professional degree is a pathway to higher income and human capital


health correct answers affects human capital in both the short term and long term
- healthy people work more hours and longer periods of time
- healthy people tend to eran more money on an annual basis


social capital correct answers how well you are able to forma a connection with other people
-social capital is not found in individuals themselves but rather in the space between individuals
or a network of connections among people


informal networks correct answers interpersonal relationships who you form with your family
and close friends


formal networks correct answers connect you with the people in professional, recreational,
leisure, and social communities

, investment pay back period correct answers how long it will take to earn back your investment
-comparing the cost of your educational program to the additional annual income you'll earn
once you have completed it


payback period correct answers payback period = total costs/ increase in annual income


- the longer the payback period, the more you should question the economic value of your
investment


Financial Statement Analysis correct answers a financial planning approach
- a step in analyzing a client financial status


emergency funding correct answers this fund should contain 3-6 months of expenses in case of
an emergency


financial ratios correct answers liquidity ratio
debt service to income ratio
asset to debt ratio


liquidity ratio correct answers can i pay for emergencies
- measures how many months you could pay your monthly expenses from your liquid assets
-monetary assets/ monthly expenses
-3-6 months


debt service to income ratio correct answers can i meet my total debt obligation
-measures percentage of gross income required to make debt payments