FINANCIAL PLANNING TOOLS
Financial Planning Tools are the instruments used to meet current and future financial goals through a sound financial plan.
Financial Planning Tools generally fall into two categories:
(a.) Wealth-Growing Tools
(b.) Protection Tools
The wealth-growing financial planning tools are those that help you grow and compound the value of your money over time. As such, these tools are best suited to meet financial goals that require big cash outlays such as buying a car, buying a house, preparing for your wedding or preparing for retirement.
Examples of these wealth-growing financial tools are:
To make your money grow meaningfully over the years and to understand better these wealth-growing tools, you need to consider the relationship between two major variables in investing: RISK and RETURN.
These two variables have an INVERSE relationship. Simply put: the higher the risk, the higher the potential returns; the lower the risk, the lower the potential returns.
So if your objective is to achieve higher rates of return for your money over time, you should be ready to take risks with your money - meaning that you should be able to take periodic loss of capital. Stocks, stock or equity-based VUL life insurance and stock-based mutual funds are some of the wealth-growing tools that exhibit relatively higher risks.
On the other hand, if you are not ready to take on risks with your money, you should put them in lower risk tools like bonds, bond-based VUL life insurance or a bank account.
The Protection tools of financial planning are those whose main objectives are to serve as a robust cushion of support to you and your family's financial state should death, devastation, accident, illness or disability happen to the person who brings in the money and income for the family.
These protection tools provide either a lump sum or partial cash infusion to you or your family in the event of the occurrence of one or all of those circumstances.
Since major disruptive events are largely unpredictable, it is wise to use these protection tools in conjunction with the wealth-growing tools mentioned above for a truly comprehensive financial plan to work well for you.
Examples of these protection tools include:
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"Someone is sitting in the shade today because someone planted a tree a long time ago"
Edwin T. Bartolome
Financial Advisor and Certified Investment Solicitor
License # 090848
CR # 02-2013-08539
For Appointments and Free Consultation, you can reach him at:
and E-Mail: email@example.com
Baobab New Business Office
Sun Life Financial
6/F BTTC Centre,
288 Ortigas Avenue
Greenhills, San Juan City
Tel. No. 719-3958
Fax. No. 719-3894
Sun Maxilink Prime VUL
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