Three Elements of Financial Health
 #1)   Risk Management
Life offers few certainties, many possibilities, and inescapable risks. Fortunately, there are financial tools suitable for managing the effects of unexpected challenges. Would our death have a financial impact on our partner or family? If so, we consider inexpensive term life insurance. Is there an adequate replacement for our income in case of accident or illness? If not, disability insurance may be appropriate. If we're concerned with the emotional & fiscal cost of our upcoming 'golden years', we may consider long term care insurance. And if we want to determine how our wealth will eventually be distributed to friends, family, and community, we begin estate planning.
    #2)   Savings
    I recommend that clients articulate their savings plan into at least two categories. The first is designated as an Emergency Fund, with 3 - 6 months living expenses put aside. Another account is created for Pleasure & Leisure, i.e. vacations and expensive gifting. Additional money markets are established for any short-term goal (less than five years) where investing in the stock market would be inappropriate. Community Investing can also be considered as a component of the Savings element.

    #3)   Long-Term Growth
    Long-Term Growth refers to the accumulation of funds necessary for retirement and the distribution of a retirement portfolio that will insure adequate support for a desired lifestyle. Long-Term Growth also reflects some parents' intention to fund their children's college education. In any case, a strategy of risk-adjusted, socially responsible asset allocation with re-balancing is always utilized, versus individual equity selection or market timing.


    ** Social Investment Forum: 2011 Report on Socially Responsible Investing Trends in the U.S.

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