| Financial planning is not limited to asset allocation, | | | | premiums than you take out in claims - thus, they |
| mutual funds, and fixed-income investments - | | | | profit. |
| planning should include every aspect of your life. | | | | Your goal should to pay as little in premiums as |
| Should you apply for that credit card? What type | | | | possible in order to be adequately covered. You |
| of car insurance should you buy? Should we save | | | | don't want to have to use your auto insurance, |
| for our child's college or put money in our IRA's | | | | but at the same time, you don't want to be |
| instead? These and many more questions are all | | | | subsidizing the bad drivers who take out more in |
| part of financial planning. | | | | claims than they pay in. |
| The Larry Rule - A Little Known Financial Planning | | | | In order to develop a financial planning strategy |
| Fact | | | | for auto insurance, it's important that you become |
| Larry Lindsey is not a famous name, even in | | | | as educated as possible on the subject. Luckily, |
| financial circles. Currently, Mr. Lindsey is the chief | | | | there are dozens of great sites on the internet |
| economic advisor to the Bush Administration. In | | | | that provide free information on the various |
| 1996, he was a Federal Reserve Board Governor | | | | types of auto insurance plans, and the particular |
| - and he was denied for a Toys 'R Us credit card! | | | | laws of your state. |
| To apply or not to apply, that is the planning | | | | Everyone has to own some form of auto |
| question. Larry Lindsey, who had excellent credit | | | | insurance, and thus it should be the cornerstone |
| and a high-income level, set out to demonstrate a | | | | of any intelligent planning strategy. |
| flaw in credit scoring algorithms. | | | | The Financial Planning Dilemma - College vs. |
| He simply applied for every retail store credit card | | | | Retirement |
| he was offered, and in no time he had "too many | | | | American parents love their children and will do |
| inquiries." Never mind the fact that he had millions | | | | almost anything to ensure they have every |
| in assets and nary a late payment in his 30-year | | | | possible advantage. As a result, many parents |
| credit history. | | | | save for their children's college instead of saving |
| Knowing the Larry Rule is key to your financial | | | | for their own retirement. This act of selflessness |
| planning. If you apply for retail store credit cards | | | | is usually not a good planning strategy. |
| every time you are asked to do so, it will have | | | | In order to avoid this mistake, one must have a |
| negative effects on your credit. | | | | decent understanding of financial planning tax |
| You may then be asked to pay a higher interest | | | | implications. Most college savings accounts are |
| rate on your mortgage or home equity loan, | | | | taxed on some level, whereas financial planning |
| which could cost you tens of thousands of dollars. | | | | products for retirement purposes generally are |
| Sacrificing $10,000 for a 10 percent discount at | | | | not. What's more, saving for your child's college |
| Fashion Bug is not smart planning! | | | | can prevent him or her from receiving the |
| Auto Insurance and Financial Planning | | | | maximum financial aid available. |
| Most people think of insurance as a legal | | | | In other words, by foregoing your retirement in |
| necessity, but in reality, it is a financial product, | | | | favor of your child's college, you are actually |
| and that's important to keep in mind. Don't ever | | | | subsidizing the children of less responsible parents |
| buy insurance just because it's legally required or | | | | - or smarter parents who chose to save for their |
| in order to give yourself peace of mind. Insurance | | | | own retirement, in light of these facts. |
| must serve a financial planning purpose! | | | | College savings plans normally make financial |
| You need to have a planning strategy in mind | | | | planning sense only for parents with such high |
| when you purchase auto insurance. The insurance | | | | incomes that their children would not qualify for |
| company's goal is to get you to pay more in | | | | financial aid. |