YOUR SIX FINANCIAL CONCERNS
INFLATION HEDGE
Inflation has been with us since the time of the Pharaohs.
It is usually most
severe during periods of economic growth. Growth tends to be
accompanied by an expansion
in both the money supply and bank credit, increasing the demand
for goods and services,
and in turn forcing up prices. You need to obtain an
"Inflation Hedge" through
investments to prevent the loss of purchasing power with the
"partially
counterbalancing" use of growth investments. These tend to
increase in value during
inflation, thus may offset the loss of purchasing power.
TAX ADVANTAGE
The income tax bite on the growth and earnings of your
investments is perhaps the
most important restraint on efforts to increase the value of
assets. How important is it
for you to minimize tax losses by owning properties that can
produce growth or earnings
sheltered from taxes, and sometimes can even produce tax
deductions against income from
other sources? Your use of the tax reduction methods permitted by
the tax laws is as much
part of your legal rights as are voting and owning property. Tax
laws assume that people
will use the tax reduction methods available to them. When
taxpayers do not do this, they
are paying more taxes than needed.
SAFETY
This idea measures the need for security against the risks
of the financial
marketplace, so that you will not lose any of the money you set
aside in savings. A high
score on safety shows your need for safe investments, a low score
shows your willingness
to take risks.
LIQUIDITY
A high score shows your need for assets that can be
quickly converted to cash. You
may wish to take advantage of the opportunity to make an
excellent investment at the right
time; buy into a business; start one; finance a special business
venture; send the
children to college; stake them to a start in life; or buy that
vacation home at a
favorable time. You would also be prepared to meet the needs of
an accident, illness,
disability, death in the family, or unexpected expenses.
CURRENT INCOME
This is a general measure of the concern or need for
current income from investment
assets rather than growth of principal value. This income is
usually taxed. This current
taxation reduces the amount that is available for reinvestment
and thus works against your
ability to accumulate significant assets. The withdrawing of
principal for income also
would be considered current income, though would usually not be
taxable.
FAMILY BENEFIT
Measures the degree of concern you have so that your
portfolio does not cause
anxiety, expense, loss of capital or the forcing of decisions
that are not in the best
interests of your surviving spouse and children; or that would be
difficult for your
survivors to supervise or use.
