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Planning Beginner: Principles of Financial Planning

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1.
In order to work, financial planning requires that you _______.
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Set goals. While the other choices may eventually be necessary, the only requirement is that you set some goals.
2.
Once you have made a financial plan, _______.
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You must review it and change it if necessary. Plans are not set in stone, and neither are they self-correcting; you must revise them over time.
3.
Good financial planning is methodical in nature.
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True. It uses a set of measurable, defined procedures to create a picture of your financial life.
4.
Risk management is typically covered in a professional financial plan because _______.
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Risk can destroy your wealth. That is why insurance is included in most financial planning.
5.
When you work with a financial planner, he or she will draw up a document that expresses your net worth. What is this document called?
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Balance sheet. More specifically, it is called a personal balance sheet. It expresses your assets, your liabilities, and your ultimate net worth.