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August 17, 2011

Life Events

My posting relating to financial planning frequently refer to anticipated and unanticipatedevents.  Your planning must consider all aspects of financial planning.  All elements of financial planning must be woven together to increase the likelihood that you will achieve your financial needs, wants and wishes.  We all know there are “life events”, but we do not know when they will occur or what the consequences will be. 
What events do you include in “life events”?  Possibly the the first ones you think of include: birth, marriage/civil unions, divorce/separation and death.  Some events relate to employment, such as: first job, new job, lost job or down sizing.  Some relating to to health include: hospitalization, prolonged illness, physical disability/impairment, mental disability/impairment, and aging.  Events relating to finances include: inheritance, awards/prizes, bankruptcy, recession, fraud/embezzlement and lawsuits.  Still other events include; remarriage, adoption, and childrens’ success and failures.  You can think of many more “life events”.
Although “life events” are not predictable, they demonstrate the need for flexibility in your planning.  They also are examples of when cash reserves as well as savings and investments will be needed.  How your assets are owned, how you designate your beneficiaries and how your estate documents are worded are all part of the financial planning process. 
Winston Churchill said “He who fails to plan is planning to fail”.
         

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