Fundamentals of Financial Planning - Mid-Term Study
Guide UPDATED ACTUAL Questions and CORRECT
Answers
Terms in this set (59)
, 1. Understand Circumstances
2. Identify Goals
3. Analyze current course of actions
Financial Planning Process 4. Develop Recommendations
5. Present Recommendations
6. Implement Recommendations
7. Monitor Plan
Verbal/Auditory
Learning Styles
Visual
Quantitative Data Numbers/Data
Qualitative Data "Feel" viewpoint, beliefs, attitudes, desires
Objective
Defining Goals
Measurable --> time line/horizon
partnership
evocation
Motivational Interviewing
acceptance
compassion
result in a lengthy in depth response
Open Questions
Ex: tell me about your ideal retirement
seeks a specific response that can be answered in one or 2
words
closed questions
Ex: Do you have a savings account
Joining
Communication Skills
Develop a relationship of trust
Unconditional positive regard
with client through...?
- Do not judge
Integrity
Financial well-being (As defined state of being in which a person can meet financial obligations
by CFPB) and make choices that allow them to enjoy life
Time Value of Money "a dollar today is worth more than a dollar tomorrow"
measures the excess or shortfall of cash flows based on the
Net Present Value discounted present value of the future cash flows, minus initial
cost of investment
Discount Point (of mortgage) 1% of mortgage
Savings Ratio (Employee savings + Employer contribution) / Gross income
Emergency Funds ratio current assets / monthly non-discretionary cash flows
Housing Ratio (H1) (Principle, Interest, Taxes, Insurance) / monthly gross; <= 28%
[(Principle, Interest, Taxes, Insurance) + (All other debt)] / monthly
Housing Ratio (H2)
gross; <= 36%
1. Asset accumulation
Lifecycle Approach 2. Conservation
3. Gifting / distribution
Guide UPDATED ACTUAL Questions and CORRECT
Answers
Terms in this set (59)
, 1. Understand Circumstances
2. Identify Goals
3. Analyze current course of actions
Financial Planning Process 4. Develop Recommendations
5. Present Recommendations
6. Implement Recommendations
7. Monitor Plan
Verbal/Auditory
Learning Styles
Visual
Quantitative Data Numbers/Data
Qualitative Data "Feel" viewpoint, beliefs, attitudes, desires
Objective
Defining Goals
Measurable --> time line/horizon
partnership
evocation
Motivational Interviewing
acceptance
compassion
result in a lengthy in depth response
Open Questions
Ex: tell me about your ideal retirement
seeks a specific response that can be answered in one or 2
words
closed questions
Ex: Do you have a savings account
Joining
Communication Skills
Develop a relationship of trust
Unconditional positive regard
with client through...?
- Do not judge
Integrity
Financial well-being (As defined state of being in which a person can meet financial obligations
by CFPB) and make choices that allow them to enjoy life
Time Value of Money "a dollar today is worth more than a dollar tomorrow"
measures the excess or shortfall of cash flows based on the
Net Present Value discounted present value of the future cash flows, minus initial
cost of investment
Discount Point (of mortgage) 1% of mortgage
Savings Ratio (Employee savings + Employer contribution) / Gross income
Emergency Funds ratio current assets / monthly non-discretionary cash flows
Housing Ratio (H1) (Principle, Interest, Taxes, Insurance) / monthly gross; <= 28%
[(Principle, Interest, Taxes, Insurance) + (All other debt)] / monthly
Housing Ratio (H2)
gross; <= 36%
1. Asset accumulation
Lifecycle Approach 2. Conservation
3. Gifting / distribution
