Meeting your needs involves bringing their circumstances in perspective. Simpson Capital uses a financial planning framework to develop these circumstances. The SCM Financial Planning Guide describes the framework elements.
The purpose of financial planning is to help you and your family achieve your life goals through proper management of your finances. This process results allow you to see where you stand financially and determine what steps are needed to reach your objectives.
The benefit of planning provides direction to financial decisions and gives insight into how each decision affects other financial areas of your life. Viewing each financial decision’s impact on the whole allows you to consider the decision’s effects on your short- and long-term goals.
SCM breaks down the components of planning into manageable pieces for greater understanding. Below is a summary of the components. Visit the individual section pages for more information:
- Financial Statements and Recordkeeping– These statements are important tools in evaluating and monitoring your financial status and should be prepared and revised regularly. Without them, it is difficult to deal with planning problems and opportunities. These statements include changes of financial conditions (balance sheets), changes in net worth (income statements) and budgets. Effective practice includes developing and maintaining an effective recordkeeping system. Visit our Financial Statements and Recordkeeping to learn more detail.
- Insurance Planning– Proper coverage is a prerequisite to any wealth-building program, since a gap could jeopardize assets and future earnings. Considerations include coverage gaps and duplication, limits of each policy, coverage of dependents and cost of insurance. Areas of coverage include life, health, disability, homeowners/renters, automobile, extended personal liability and professional liability/malpractice. Visit our Insurance Planning page to see what types of insurance may be appropriate.
- Credit Management- Borrowing is a double-edged sword. On one hand, you might rely on borrowing at least periodically to meet your financial planning objectives. On the other hand, credit has the always-present potential for over extension, which can affect clients of all income levels. Easy credit has burdened millions of people who may have to spend many years getting back to a firmer footing. Visit our Credit Management page to see how it affects your finances.
- Capital Accumulation– Capital accumulation and preservation is the focal point of the financial planning process. Capital accumulated during your working years gives you an important source of retirement income. Estate planning can help you maximize the amount of wealth left to your heirs in accordance with your wishes. Historically, real estate has provided excellent, long-term returns well in excess of inflation but real estate carries risks. Visit our Capital Accumulation page to learn about investments.
- Tax Planning– The objective is to pay the lowest tax legally permissible consistent with overall financial planning objectives. Taxes affect almost every area of planning from setting objectives to investing and from insurance planning to estate planning. SCM not only considers the tax effect of a proposed action but develops a sound and comprehensive strategy to address your tax requirements. Visit our Tax Planning page to see how to improve your income.
- Retirement Planning– Achieving a comfortable, financially independent retirement is the ultimate goal of financial planning. Elements include determining a retirement life-style, estimating expenses, timing considerations and planning the retirement period. Considerations include Social Security benefits, pension plans, IRAs, self-employed retirement plans and annuities. Visit our Retirement Planning page to help plan for your golden years.
- Estate Planning– Despite the necessity and advantage of early planning, most people are reluctant to deal with the subject due to difficult emotional issues coming to light. Its neglect leads to needless expense, confusion, delay and frustration. When properly executed, planning ensures the transfer of your assets to your designated heirs, preserves assets during your lifetime by reducing taxation and alleviates the administrative confusion which often accompanies death. Visit our Estate Planning page to to improve your plan.
SCM provides head coaching of your planning process with heavy emphasis on investment management. SCM is not an expert in most of these areas and relies on outside resources and professionals when needed. If you are a professional expert in these areas and wish to contribute, please feel free to contact us.
The financial planning framework for this guide was adapted from Mr. Simpson’s lecture notes used for classes taught at UCLA’s Anderson School of Management.
Visit our Investment Guidelines page to see how these components are integrated into the portfolio management process or visit Open An Account to have SCM help manage your future.
