earned by employment, but other sources, such as possible inheritances, must also be considered. Increases in hard asset wealth, such as rising home prices, will be affected by general economic conditions as well as owner enhancements. From here, things get trickier, and this is where the true planning begins! Our particular stage in life -- whether we are young, old, or somewhere in the middle -- will usually lead us to desire a particular set of goals. Financial planners often break down our life cycles into distinct phases. Which phase we are in is often determined by age but will also be dictated by how much risk we are willing to assume. Younger people are most often described as being in an accumulation phase. Their earnings have not yet hit their peak, but at the same time they are striving to obtain both hard and soft assets. Examples here include saving for a new home or a child's education. Risk assumed here will be tempered by the time constraints of these goals as well as individual risk tolerance. In general, the longer the time frame, the more investments in the aggressive category may be considered. The other phases extend to middle age and beyond to retirement. Our middle age years often find us at the peak of our earning power, with many of our former goals satisfied. This will mean greater savings are possible, and as time progresses towards retirement, our tolerance for risk will necessarily diminish. Financial planning takes all of this into account and more. Other factors, including planning for health care and other insurance needs, preparation for emergency expenditures, tax and estate planning and the like will all be part of the strategy. Unexpected windfalls may also enter into the picture. Saving for retirement becomes increasingly important as the time earned income will end draws nearer. All of these variables add to the importance of financially planning across all stages of one's life. It is a concept that encompasses your total financial picture -- both in the present and for the future.
haramis@greekshares.com http://www.greekshares.com Ioannis - Evangelos C. Haramis was born in Greece in 1951. Studied Business Administration, Marketing and Economics in Greece, USA and in Belgium. He has been active in the stock markets since 1972. Since 2002 he is New Business Development Managing Director at an Investment Bank.

Here are some more financial planning articles...