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The 6 Key Aspects of Your Personal Finances

There could be some measure of relief, or perhaps consternation, in knowing the exact dollar value of your net worth. For good or ill, it’s important to know the precise value of all your holdings so you can more accurately plan your financial future. When you don’t know what you have, it’s hard to know how much you need to step into the dream life you envision.

When you work with a professional financial advisor, you will be asked questions about your salary, your spouse’s salary, savings accounts, portfolio investments, real estate and the other material assets you own so an accounting can be made that determines your current financial worth.

Similarly, there will be a discussion about your liabilities, such as your mortgage, credit card balances, loans, and any other forms of indebtedness. The difference, of course, between your assets and liabilities is your net worth. Once your net worth is known, your assets can be reviewed in relation to the capacity of time to enhance your wealth, and plans can be developed to help you meet your goals.

Here is an overview of the six key areas to study when conducting an analysis of your personal financial circumstances:

1. Retirement Planning: Retirement planning is a complex and serious activity because so much is at stake and there are limited second chances. Planning for a future based on guesswork requires knowledge and experience, and is best conducted by hiring the services of a financial professional specializing in retirement planning. Just as you wouldn’t entrust an appendectomy to a carpenter or drilling an oil well to a dentist, you need a professional with the right kind of experience and training. Food and gas prices are continually increasing, health and technology advances are extending lifespans, and the social patterns of our daily lives keep changing which impacts the amount of funds needed for securing a potentially lengthy retirement.

2. Estate Planning: Most people want to leave something for their heirs, and wish to distribute as much as possible to their families, friends, and to special causes they support. A careful plan will ensure your legacy is not lost to creditors, predators, or squandered by your children. The estate tax can reduce your assets substantially, but smart planning is likely to fulfill your intentions.

3. Insurance Planning: The proper use of insurance can protect you and your loved ones from the financial risk of the unexpected, and can also provide financial security and benefits such as long-term care. There are varieties of special and standard insurances that can protect your financial well-being when you and your family need stability.

4. Tax Planning: Taxes are needed by local, state and federal governments to fund various community programs, but there are also many incentives available that can reduce your personal tax burdens. Research shows that taxes are the greatest expense to a person’s net income and knowing how to apply tax reduction incentives can serve ably to retain and build your financial strength.

5. Investment Planning: Precision investment planning can help an investor employ his or her current resources to accelerate return while guarding against risk. Each investor has their own unique circumstances, so a customized portfolio built to suit the investor’s personal financial needs should be crafted to protect the investor’s resources while identifying opportunities that can increase the investor’s wealth at a pace that reaches the goal within a calculated timeline.

6. Real Estate Planning: Real estate can be a benefit to a portfolio as an alternative asset class, either through the appreciating value of a primary residence or purchased as an opportunity for investment appreciation as well as rental income.

These are the six categories your financial planner will study to assist you with understanding the value of your personal assets and then determining the potential for augmenting their value and help you achieve your financial goals.

If you’re interested in reviewing these six key areas to help you determine your current net worth and devise a plan for building toward a comfortable and secure retirement, make an appointment to consult with your financial advisor today.


Synergy Financial Management, LLC

13231 SE 36th Street, Suite 215

Bellevue, WA 98006

ph: 206.386.5455

fx: 206.386-5452