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Financial Statements

Using Financial Statements, Tools To Plan Your Future

Know what you have before planning the future using specific financial tools and financial statements.


There are many famous quotes about the importance of enjoying the present and not focusing too much on the past or the future. We do this in our personal lives and with many of our responsibilities, such as work, education and our finances. As a financial planner, I meet with many people seeking assistance with meeting specific financial goals and find that many times they have ideas of what they want and what they have already done. This is great, but before planning the future, it is important to know what you have now, a snapshot of your current situation. This is a critical piece, not only for individuals, but businesses, too.

Before focusing on investment news, what stocks are hot, politics and what might be a new trend in the investment world, investors should focus on understanding their current position. It is nearly impossible to determine the right mix of investments and what strategies may be appropriate without knowing this. Investors can use specific financial tools, including different financial statements, to help them identify what they have. These tools can apply to both individuals and businesses.

The first step is a data-gathering process. The second is imputing the information from various financial statements. For individuals, we would include a statement of financial position and a statement of cash flow. For business owners, we would include a balance sheet, income statement, statement of cash flow, and a pro forma statement. These are great tools that can help identify one’s financial position.

When creating a statement of financial position, one will clearly list his or hers assets and liabilities. Assets, such as real estate or other valuable items, should be considered at current market value (the price that one is willing to pay today for it). Assets should be categorized as cash and cash-equivalents, such as checking, savings, money market accounts, stocks, bonds, mutual funds and life insurance. Liabilities include credit cards, auto loans, unsecured loans, real estate mortgages, education loans and personal debts. This will provide individuals a balance sheet of assets at a particular point in time.

The next important piece is a statement of cash flow. Some of us may know this as an income statement. This statement will show inflow of income and outflow of income at a particular point in time. The inflow may include salaries, sale of assets, investment dividends, rent and bonuses. Outflows may include mortgage payments, auto payments, credit card payments, insurance, general living expenses and taxes. The statement of financial position and statement of cash flow are valuable tools to have before implementing an investment plan.

A pro forma statement is the last tool to use and includes future projections of the balance sheet and cash flow statement. This is important because as our economy and life situations change, we may need to adjustment our plan as needed. The same process also applies to business owners. However, the business entity will need to consider many more details regarding assets and liabilities, as well as inventory and staff.

Once the financial statement process has been completed, one will have a greater understanding of his or her position when beginning an investment plan. In addition, this process can improve the odds of success and allow more control in an investor’s decisions.

For more information about financial statements and financial planning, visit jacobgold.com.

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc.

This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

Financial Information

Properly Understanding Financial Information In The Media

Our society is constantly overwhelmed with financial information either by television, internet, cell phones or print media. Deciding which is best and most accurate can be very daunting for the average investor. In addition to choosing the right media source, investors also have to apply that information to their financial situation. In many cases, this can become a full time job, very challenging and requiring constant monitoring.

Minimal education is provided to us by our parents, peers or in school about how our financial system works. However, since it is an ever changing industry the information we have learned in the past may not be relevant today. Therefore, it is critical to understand what reliable information is and what may be misinformed facts.

These media sources are a critical role in today’s society but also come with some information risk. Everyone’s interpretation is different and we must realize that a percentage of the information is purely entertainment. In today’s environment, the media is influenced by marketing dollars, and understanding what may be accurate information and what may not is important to understand.

With tons of information about the financial industry — that (in many cases) is indirectly affected by other sources such as politics, government, other countries, weather, market shifts, innovations and technology — being properly informed and avoiding the “junk” information can be difficult, but must be done. As investors, we must not only focus on the investment, such as a stock, bond or mutual fund, but consider the strategies in place to account for current events.

Also, once an investor has decided on an appropriate investment strategy he or she will then manage the investments or work with a financial professional. Information is key and deciphering that information according to a situation can be difficult when creating an appropriate investment strategy as well as making changes within a portfolio as needed based on economic shifts. Many times, working with a financial professional can help investors use up to date, reliable information to meet financial objectives.

For more information regarding understanding financial information, visit jacobgold.com.

 

Securities and investment advisory services offered through ING Financial Partners, Inc. Member SIPC. Jacob Gold & Associates, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc.

This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

Estate Planning: Planning Your Future

Estate Planning: Planning For The Future

Estate Planning: Planning for the Future

When planning your financial future, it is important to consider an investment strategy, risk tolerance and time horizon. These are critical aspects of building wealth.

Although many of us focus on the now, we forget about organizing our finances and personal interests upon our passing. This aspect of planning is neglected many times and can put everything at risk. As investors, we will spend many years saving and planning; we should take the steps to protect all that we have built. This can be done by arranging an estate plan that will allow you to pass on your assets to who you want, how you want, and when you want.

This type of planning may seem overwhelming, but an effective estate plan doesn’t need to be complicated. It can be broken down in two key elements. The first is having a durable power of attorney and the second is a will.

Having a durable power of attorney will allow you to manage your assets while you are still living by appointing someone to act in the event you are unable to do so. A will focuses on managing and distributing your assets after death.

In addition to these key elements, an estate plan can help avoid the problems and expenses of probate, avoid family conflicts, provide flexibility in estate management, and minimize taxes at the time of death. These are some of the benefits and why estate planning is so important. However, how does one get started on setting up an estate plan?

Most estate planning objectives can be accomplished by hiring an attorney or by using an online “do-it-yourself” approach. The cost of hiring an estate planning attorney to assist with the development and implementation of an estate plan is typically far outweighed by the benefits of recruiting experienced council. The person who decides to save money by using an online service is likely to make costly mistakes, says estate attorney Kari Meyrose of Gorman and Jones Law Firm.

“Estate planning attorneys spend many years learning the contours of estate planning rules and methodologies, and they have the ability to forecast the potential outcomes that may result from an individual estate plan,” Meyrose says.

Estate plans range from simple to very complicated, and in some cases the cost of not using an attorney may actually end up being a very costly lesson for loved ones. Either way you decide— do it yourself or use an attorney — don’t procrastinate in making a choice and take action in planning your future.

For more information about estate planning or Jacob Gold & Associates Inc., visit www.jacobgold.com.

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This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.[/stextbox]

Key Elements to Retirement Planning

Key Elements To Retirement Planning

There are countless books, articles, and videos that discuss how to plan for your retirement — many of which can be found at universities, books written by financial gurus, business owners, institutions and professionals in the industry. If one were to Google retirement planning, there would be tons of information, multiple websites, retirement calculators and sources to learn about what to do and how to do it.

There is no one right way to plan or a single investment strategy that works for everyone. But there are some important elements to follow that can help improve the odds of retiring successfully. Some of them include investment strategies, retirement timeline, risk management and asset protection, and estate planning.

Investing has many levels that range from very risky to very conservative. An investor can choose to invest in stocks, bonds, annuities, insurance and real estate. All of these can be valuable if used the proper way and for the right purpose.

But before choosing an investment, I would recommend to complete a series of questionnaires to learn more about what may be suited for that investor. Also, having a good mix of different risk levels and different products can help provide opportunity and protection.

Another important element that should be at the top of the retirement planning list is the value of time. The earlier we start the better the odds to navigate through difficult markets and the better we can plan for life changing events. Navigating through difficult markets is very challenging and staying the course usually works to the investors favor. Having the courage to stay invested and setting aside emotional decisions is critical. Also, by starting sooner it will allow investors to take advantage of compound interest.

Risk management and asset protection can be looked at in many different ways. The most common, is protecting our loved ones by insuring them and the assets we have accumulated. Unknown events will occur from time to time and preparing for these events before they happen can make or break our retirement success. Balancing for the now as well as the future is essential.

Once we have reached our goals, investors should plan to protect their estate with the hope to pass it to their heirs. This task first begins by organizing financials and personal interest to meet one’s wishes upon their passing. The best and most appropriate way to accomplish this is to seek the services of an attorney. It is important to provide the attorney all of the necessary information and have thorough discussions of your wishes so they can be carried out accordingly.

These are important elements of retirement planning and vary per person or household. It is important to take the time to research and learn about what steps to take in starting your plan, managing your plan, and having a resolution to your estate. I recommend working with a financial professional and reviewing your plan annually.

For more information about retirement planning and investing, visit Jacob Gold & Associates’ website.

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This information was prepared by Michael Cochell of Jacob Gold & Associates Inc. and is for educational information only. The opinions/views expressed within are that of Michael Cochell of Jacob Gold & Associates Inc. and do not necessarily reflect those of ING Financial Partners or its representatives. In addition, they are not intended to provide specific advice or recommendations for any individual. Neither ING Financial Partners nor its representatives provide tax or legal advice. You should consult with your financial professional, attorney, accountant or tax advisor regarding your individual situation prior to making any investment decisions.

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