What Is A Personal Investment Plan


Personal Investment Plan Example

What is Personal Financial Planning and its Importance? – Franklin Templeton India
  • General Investment Goal $24,000 in passive income
  • Asset Classes Dividend stocks and REITs.
  • Time Horizon Expected retirement date of January 2040.
  • US, Canada and Europe.
  • Amount of holdings 40 individual investments.
  • Criteria for buying investments Dividend Athletes 13 ratios.
  • Criteria for selling investments Dividend cut, 3 consecutive years of earnings decline, debt/EBITDA over > 5x for 3 consecutive quarters.
  • Asset class/country/holding weighting Equal weighted between positions . 75% dividend stocks 25% REITs. No cap on country weightings.
  • Evaluation of holdings and re-balancing time frame Holdings analysed annually in Q4 of each year, re-balancing starting in 2035 in Q4 of each year until retirement in 2040. Holdings will be re-balanced based on dividend income, with no individual holding making up more than 7.5% of total income.
  • Fixed % of portfolio for gambling 5% of total invested capital in a separate account. To be allocated without set criteria.
  • What Are Your Personal Circumstances

    If you’re a parent with financially dependent children, then you’re probably going to be more cautious with your savings than someone who is single and doesn’t have any dependants, and therefore more likely to choose a low to medium risk and possibly short term investment.

    For someone who is self-employed the priority may be finding a product that allows flexible contributions to suit a more erratic income pattern.

    It’s important that you to take a close look at your circumstances and how they affect what investment you opt for before you make a commitment. There are a lot of different ways to invest money including property, fixed rate bonds, cash, shares and alternative assets. Think carefully about the level of risk you want to take. What seems like the best return on investment might be exposing your investment savings to higher levels of risk. You might be better with investment options that are more conservative if you want the best short-term investment product i.e. for five years or fewer.

    Do you have a pension? Find out more about When should I invest in a pension?

    Make An Investing Strategy Thats Right For Your Needs With A Personal Investment Plan

    Want to know the worst mistake in investing, the mistake almost all individual investors make?

    Its a mistake that causes the average investor to lose money and underperform the stock market by a wide margin.

    Even after the worst stock market crash in nearly a century, stocks managed to return an annualized 7.4% over the ten years to 2013. Even bonds did pretty well as ever lower interest rates helped corporate debt to an annual return of 4.6% over the period.

    Average them out and an investor with a 50/50 portfolio should have made about 6% a year over the decade.

    You probably wont be dining on caviar every night on 6% but its a respectable investment return and all most people need to reach their dreams of financial freedom.

    Unfortunately, actual investor returns fall far short of these investment averages.

    The average investor with a stock & bond portfolio earned just 2.6% a year over the decade to 2013. Thats just 0.2% over the average rate of inflation! At that rate, it would take 168 years to accumulate a $1 million portfolio by saving $5,000 a year.

    Why do individual investors do so poorly investing in their financial future?

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    How Old Are You When You Are Investing Money Risk Changes With Age

    Longer term, higher risk investment options may be more attractive to someone in their thirties than to someone who is getting close to retirement.

    People tend to invest money in lower-risk products as their retirement approaches. Some pension funds automatically switch investments to safer havens in the five years before your stated retirement age. If you have a private pension you may have to ask your provider to do this for you, whereas most workplace pensions will start to make the gradual switch for you as you near retirement.

    People often ask what to invest in now and look at popular or trendy investment, but it’s important not to be driven by fashion. For example, if you’re looking for safe investments then you don’t want to be putting all your money in risky shares. On the other hand, if you’re looking for the best way to invest £10,000, and you can keep your money invested for five year or more, then stocks and shares might be the best things to invest in. These types of investment could form a bigger part of your overall savings plan.

    Your savings money is protected in the UK by the Financial Services Compensation Scheme. Find out how the FSCS protection works with our Uswitch guide.

    Determine Risk Tolerance And Time Horizon

    11+ Personal Investment Plan Templates in PDF

    The next step in crafting your investment plan is to decide how much risk you are willing to take. Generally speaking, the younger you are, the more risk you can take, since your portfolio has time to recover from any losses. If you are older, you should seek less risky investments and instead invest more money upfront to spur growth.

    Additionally, riskier investments have the potential for significant returns but also major losses. Taking a chance on an undervalued stock or piece of land could prove fruitful, or you could lose your investment. If you are looking to build wealth over years, you may want to choose a safer investment path.

    Determining your time horizon is fairly simple compared to its risk counterpart. The term essentially means about when do you want to begin pulling from your investments for your ultimate financial goal. For the vast majority of Americans, time horizon is basically synonymous with retirement.

    By figuring out your risk tolerance and time horizon, you can build a reliable asset allocation for yourself. This entails taking your investor profile, figuring out what you should invest in and what percentage of your overall portfolio each investment type should take up. Try using SmartAssets asset allocation calculator to get started.

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    Newly Available Bitcoin Iras Offer Unprecedented Access To Crypto For Retirement

    It’s pretty difficult to ignore the cryptocurrency craze — despite the well-publicized price volatility. More now than ever, people are trying to find new ways to incorporate Bitcoin into their respective retirement plans. Recent IRA offerings seek to meet this demand.

    Enter the Bitcoin IRA. The Bitcoin IRA provides crypto access to investors trying to diversify and tax-optimize their portfolios whether this is a good decision remains to be seen. Here, we’ll explore the reasons you might consider — or entirely avoid — the Bitcoin IRA.

    Decide What To Invest In

    The final step is to decide where to invest. There are many different accounts you can use for your investments. Your budget, goals and risk tolerance will help guide you towards the right types of investment for you. Consider securities like stocks, bonds and mutual funds, long-term options like 401 plans and IRAs, bank savings accounts or CDs, and 529 plans for education savings. You can even invest in real estate, art and other physical items.

    Wherever you device to invest, make sure to diversify your portfolio. You dont want to put all of your money into stocks and risk losing everything if the stock market crashes, for example. Its best to allocate your assets to a few different investment types that fit in with your goals and risk tolerance in order to maximize your growth and stability.

    Once you reach this step in the process, it may be appropriate to find a financial advisor. An advisor can help you determine the best ways to invest your money based on your current financial situation and goals.

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    Key Points To Consider

    Scottish Widows pay tax on the growth of underlying investments, which means that there is no personal liability to income tax at the UK basic rate, or to capital gains tax.

    However, you may have income tax to pay if:

    • You normally pay tax above the UK basic rate when the gain arises.
    • The chargeable event gain results in you becoming a higher rate or additional rate tax payer.
    • If you’re unsure about the tax implications of making a withdrawal from your PIP we suggest that you speak to a financial adviser.

    For more information please refer to the Key Features and Guide to Making Withdrawals

    Personal Financial Plan Example Conclusion

    Personal Financial Planning Tips : How to Create an Investment Portfolio

    This personal financial plan example is based on hypothetical information and thus you need to provide your details regarding your present resources and objectives to your planner.

    I hope that the illustrations within this plan will be a valuable insight into the evaluation of your finances even though it does not fully represent the culmination of your planning path.

    Financial planning has no one fit all approach as it is a continuous process. This hypothetical illustration of mathematical principles is custom made to model some potential occurrence.

    Use these money hacks from millionaires to continue your personal financial planning and stay on top of the game.

    Will you use this personal financial plan example? Have you created a personal financial plan to help secure financial success? Please let us know in the comments below. Wed love to hear from you.

    Millionaire Mob is an early retirement blog focused on passive income, personal finance, dividend growth investing and travel hacking. With both a million rewards points and a million dollar net worth you can live a happier lifestyle.

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    Escalate Your Life.

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    Things To Think About

    The investment you made into your PIP should be viewed over the medium to long term, at least a five to ten year period, to help meet your financial objectives. Leaving your money invested over the longer term means youre less likely to be impacted by short-term ups and downs in the stock market.

    Before withdrawing funds from your PIP its important to consider:

    • Youll lose any future investment growth on anything you take out of your plan.
    • You may have income tax to pay when making a withdrawal.
    • Your plan may receive Yearly Management Charge reductions which could be lost if you take money from your plan â you can find more information about YMC reductions on pages 4â5 of the Key Features.
    • You may be eligible for a loyalty bonus in the future, which could be reduced or lost if you take money out of your plan. if you dont need all the money in your PIP now, you could take a one-off withdrawal of the amount you need and leave the rest invested, or you could set up regular withdrawals from your plan.
    • If you hold money in a savings account, that might be a more appropriate source of funds than cashing in some or all of your PIP.

    To help you better understand the key points involved, we recommend that you take a few minutes to read through our PIP Guide to Making Withdrawals.

    How Do I Make A Withdrawal From My Plan

    Your PIP is made up of 100 separate parts, or segments. Withdrawals can be taken by cashing in these segments in different ways â weve listed your options below.

    Depending on the option you choose to make a withdrawal there can be an excessive and artificially high tax liability. So its important to understand your options before making a withdrawal.

    There are five ways to make a withdrawal from your PIP:

    • Option 1 â Withdraw a specific amount of money using a combination of options 2 & 3
    • Option 2 â Take a lump sum or regular withdrawals by partly cashing in an equal amount from across all segments
    • Option 3 â Cash in whole segments
    • Option 4 â Cash in a specific number of whole segments and then partly cash in an equal amount from across all the remaining segments
    • Option 5 â Withdraw all of your investment and close your plan

    Before making any decisions, please refer to our PIP Guide to Making Withdrawals which provides information on each of these options, along with some worked examples.

    To make a withdrawal please .

    Alternatively please download a Withdrawal form and return it to us at:

    Scottish Widows Limited EDINBURGH EH3 1HR

    Once we have all the information needed, your request will be processed within five working days. Payments are made through BACS and usually take 3-4 working days to be credited to your account.

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    Minimize Fees And Taxes

    While you can’t know or control the markets, you can estimate costs and taxes in advance. Take steps to minimize both. With investing, it’s not just how much you make, but how much you keep. You don’t always get more by paying higher fees and who likes to pay more in taxes? Use low cost investments and take advantage of tax-smart strategies like retirement accounts. Once you have a plan in place, you should monitor your investments and rebalance your portfolio regularly.

    When Your Income Increases

    11+ Personal Investment Plan Templates in PDF

    Do not adjust your lifestyle to reflect your increased income. Instead, add the extra income to your contributions towards your company-sponsored retirement plan. Some employers even match your contribution and will increase accordingly when you get a raise. Also, increase your contribution to your savings account and retirement accounts. Open a Health Savings Account with your employer.

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    A Smooth Transition For Members Leaving Your Group Plan

    When group plan members leave your plan or retire, the Manulife Personal Plan offers a convenient way for them to continue saving or convert their savings into retirement income with the Manulife Group Retirement Income Plan. Plan members can continue to benefit from the tools and services that Manulife offers, including: a broad selection of investment options, access to the Member secure website, Steps Retirement Program®, the GRS Mobile app, and the Manulife Customer Service Centre.

    Manulifes Transition Solutions team is available to help answer plan member questions and help them make a smooth transition to the next phase in their life. There are also tools and resources on the secure plan member site to support plan members going through a career transition or retiring.

    Personal Investment Accounts Present Investment Opportunities Outside Our 403 And Ira Programs

    What is a personal investment account?

    Itâs a way to invest your money outside of a retirement account without using a cash account such as savings, checking, or certificates of deposit. Account registration types include TOD Individual, TOD JTWROS, UTMA, Trust, and more. You can register more than one account type if you wish.

    Where would I get the money to invest in the account?

    If you have a windfall of cash, an inheritance, proceeds from the sale of a property, required minimum distributions, or extra income you wonât need , a personal investment account might be for you. You may also use current holdings in a brokerage account depending on capital gains consequences.

    How could this benefit me and my family?

    There are three tax benefits to these types of investments.

  • Pay income taxes at the lower capital gains rate on qualified dividends rather than ordinary income tax on interest income.
  • Pay as you go on the earnings of your investments.
  • For your heirs, there will be a âstep-up in basisâ to your date of death, which is the readjustment of the total value for tax purposes upon inheritance. The result is that your beneficiariesâ capital gains taxes are minimized.
  • What are my investment choices?

    What fees are involved?

    Why should I choose Member Benefits?

    Also Check: How To Become A Registered Investment Advisor In California

    Constraints On Your Personal Investment Planning

    While risk and return are the most important pieces of your personal investment plan, there are five other factors that will help you think about your own circumstances and put everything in context. These are liquidity, time horizon, taxes, legal & regulatory environment and unique circumstances.

    Liquidity is the ability to sell or convert investments to cash quickly to meet regular expenses or for emergency needs. While you may not be retiring for many more years, you may need cash soon to buy a home or pay for tuition. Certain investments like stocks are easily sold and generally do not involve high transaction fees. Other investments like real estate might take a while to sell and will cost more in fees. If you do not need money to help pay normal living expenses and you have set up an emergency savings fund, you probably do not need a high level of liquidity in your investments.

    Time horizon is the measure of how much time you have left to major spending decisions like tuition, home purchase or retirement. The idea is that, your investment risk should decrease as you get closer to needing your money.

    One of the biggest mistake investors make is putting their money in high-risk stocks even though they need that money within a couple of years. Any money you are going to need within the next year or two should be set aside in very safe investments like bonds and money market funds.

    Whats A Smart Way To Set Up A Budget

    Personal Investment Plan: Easy to Understand Tips to Create

    One method to consider is the 50/30/20 budgeting rule. Fifty percent of your income should go toward essential living expensesrent/mortgage, food, utilities, and the like. Another 30 percent should go toward discretionary spending, such as restaurant meals and clothes shopping. And the last 20% should go toward paying down debt and investing in your future retirement.

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    Investment Goals In Your 60s

    Retirement planning should be among your primary goals for investing. You are close to the finish line, so plan more conservatively to sustain your wealth.

    Shift your portfolio allocation gradually toward morestable investments. Estate planning questions can be tough to answer, but thereis no better time to ask yourself how you want to handle your estatesdisposition, life or disability insurance, and potential long-term care needs.Since your investment plan can power all of these retirement goals, it iscritical to devisea strategy with the necessary staying power.


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