Planning Beginner: Principles of Financial Planning

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1.
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.
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.
Tax planning is typically covered in a professional financial plan because _______.
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Taxes take a big bite out of your money. Good financial planning takes advantage of legal tax avoidance to preserve as much of your wealth as possible.
4.
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.
5.
Which of the following is not one of the generally practiced steps in financial planning?
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Spending your money. That is a step you do on your own, hopefully once your plan is safely in place.