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INTRODUCTION TO PERSONAL FINANCIAL PLANNING - Coggle Diagram
INTRODUCTION TO PERSONAL FINANCIAL PLANNING
Concept of Wealth
Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions
‘abundance of valuable material possessions or resources’
-‘all property that has a money value or an exchangeable value’
‘an income beyond the daily and basic requirements of a family’ or ‘surplus income’
Categories of wealth
movable properties
financial assets/ commercial papers
animals
objects of arts
immovable properties
Benefit
Improve standard of living
Minimize financial disaster
Ability to invest optimally
Accumulate sufficient wealth over time
Personal Financial Planning Process
Assess current financial resources/status
Define financial goals
Develop systematic financial plans
Implement financial plans
Monitor results and review plans/goals
financial goals
Financial goals are the personal, big-picture objectives you set for how you’ll save and spend money.
Implement financial plans
To follow what have been decided
Maintain discipline to implement with in the time frame
To review progress
Risk
Business risk
Financial risk
Purchasing power risk
Liquidity risk
Interest rate risk
Market risk