Estimating and Prioritizing Financial Goals: For the most part, a family’s goals involve money. Buying a house, a car, sending your daughter to medical school, providing seed money for your son’s startup, and taking a foreign vacation all cost money. Each of these aspirations has a measurable financial target.

The following inputs are needed to create an estimate of future expenses (the financial objectives):

  1. What would be the cost if it were done now?
  2. For how many years will the cost be sustained after that?
  3. How much would the costs climb due to inflation throughout this time period?
  4. If any of these costs must be paid in foreign currency, how will fluctuations in the exchange rate impact the financial commitment?

The investment advisor must make sure that the household’s financial goals are clearly specified in terms of the monies needed and the time available to accumulate them, as well as being realistic given their current financial condition as part of the drafting of the financial plan.

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