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How Does Financial Planning Work?


       Personal Financial Planning for individuals is more than simply investing successfully. Financial Planning integrates retirement planning, college funding planning, stock option planning, tax planning, insurance planning, and estate planning. When these topics are integrated then clients are more likely to be better off than if they merely pursued investment success.
      For example, news articles suggest that careful "loss harvesting" of capital losses may earn 50 basis points of additional Alpha.
News articles suggest that careful rebalancing of investments may also earn 50 basis points of additional Alpha.
      Avoidance of catastrophic losses because of successful risk management (such as having insurance for liability, earthquake, LTC, DI, etc.) can make a huge difference in financial well being.
      A proper Estate Plan is part of
Financial Planning. It could save significant Estate Taxes, Probate Fees and IRD income taxes and give peace of mind, which in turn increases the probability of saving money by not being pressured to make sudden financial decisions during a time when one has lost a family member.
Financial planning works best when done comprehensively by looking at the big picture and not merely focusing on one narrow topic.

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