In order to help you to achieve your goals, we must first find out what those goals are. Sometimes they are only partially formed, so part of our task is to help you clarify them so that the goals can give direction to the overall plan. Maintain focus on your needs, long term and short term.
The best decisions are always based on having the highest degree of information available. Do not hesitate to fully disclose information. It is not unusual to discover problems long after our relationship has begun. Regardless, this fact should not deter us from making every effort to formulate a plan consistent with available data. Adjustments will always be necessary, whether because of a change in circumstances or because we discover new information.
Assisting you to achieve your stated goals in an ethical manner is essential to your security and to your financial health.
identify the goals;
identify financial and non-financial objectives;
help manage taxes;
help plan for charitable contributions;
help plan for special needs;
help plan for children’s higher education;
help plan for retirement;
help plan their estates; and
help transfer wealth.
Identify Earned and Unearned Income
The purpose behind distinguishing earned income from unearned income is that each type has a different impact with regard to taxes.
Earned income is that which is the result of labor or your direct activities. Unearned income is that income that is not derived from the efforts of the client. This income is typically interest, dividends, or rental income. Another form of unearned income is that which is documented as K-1 income. This income can result from partnership interests or ownership in a corporation that has elected to be taxed as an S corporation, or from trust and estate income paid to beneficiaries of trusts or estates.
Current Budget Requirements
Money has only two functions:
to buy things, which is referred to as purchasing power; or
to earn more money—referred to as earning capacity.
Spending money wisely is a basic objective in the financial planning process. Such planning provides you with a better idea of what can be done with available funds. Given a certain level of income, you can either spend it all now or save a portion for later use.
Determining and categorizing consumption patterns or capital expenditures by fixed and variable expenses helps you see what components of the current budget can be adjusted. Another result of this classification is that you can determine discretionary income. Discretionary income is always found in the variable expense column and is almost never accounted for.
Fixed expenses are identified as those that vary little or not at all, such as mortgage or auto payments.
Variable expenses fluctuate, depending on their nature, and typically fall into one of three groups:
- Utility bills are the first group. They vary somewhat, as do property taxes.
- Credit card payments, groceries, clothing, medical and dental, and gifts.
- Leisure and amusement. These can be adjusted the most.
Employer-provided benefits can be viewed as an asset for the client’s benefit. If the client’s employer provides a benefit, the client obviously does not have the financial burden of providing that benefit with his or her own personal funds.
The more we know about your health conditions the more expedient the recommendations. Configuring a premium on a suggested policy at an assumed nonsmoker rate is a poor use of time if we find out later that you are a smoker. The date of birth on all family members or business associates, smoker status, any considerable health problems, and an observance of lifestyle become important factors in the planning development stage.
As you can see, there is more to obtaining proper life insurance then asking for a quick quote. We are required by law to test for suitability when recommending products to provide income for retirement. We want you to know up front that the questions we ask or for your benefit and look forward to helping you to achieve your goals!
Mystic Shore Insurance
341 Shewville Road
Ledyard CT 06339
PO Box 706
Old Mystic CT 06372