Personal Financial Planning Process

Question 1

Once a sound financial plan is in place, there should be no need to ever change it.

Answer 1

False

Question 2

One purpose of financial planning is to help you legally reduce the amount of taxes you have to pay on your earnings.

Answer 2

True

Question 3

Financial planning is an ongoing process. As your financial situation and position in life change, the plan changes.

Answer 3

TRUE

Question 4

A short-term goal might take from 1 to 10 years to accomplish.

Answer 4

FALSE

Question 5

Estate-planning tools such as wills, living wills, health proxies, powers of attorney, and record-keeping should all be in place to help protect you, your assets, and your heirs.

Answer 5

TRUE

Question 6

Most individuals will reach their financial goals without planning or budgeting.

Answer 6

FALSE

Question 7

The Covid -19 pandemic that began in 2020 demonstrated that most Americans have sufficient emergency funds.

Answer 7

False

Question 8

Salaries vary for individuals working in similar jobs for different companies, but one thing is clear: the more specialized skills and training a job requires, the higher the job tends to pay

Answer 8

TRUE

Question 9

All else being equal, an increase in inflation will cause investors to require a higher rate of return on an asset.

Answer 9

TRUE

Question 10

Diversification allows you to reduce risk.

Answer 10

TRUE