Components of a Financial Plan
February 12, 2025
The strategic financial planning process is different in the sense that it combines the functions of strategy formulation as well as financial planning. For many years, these two processes have been considered to be separate in most organizations around the world. Strategic financial planning merges these processes and created a hybrid approach. In a broad […]
When a new investor enters into the cryptocurrency market, they are often confused by different quotes for what appears to be the same currency. For instance, Bitcoin and Bitcoin cash have different quoted prices and so do Ethereum and Ethereum classic. This can cause considerable confusion to the novice trader. However, with time and experience, […]
In the previous article, we have already seen how fintech is changing almost every aspect of pension fund management. The fact that technology is in the process of revolutionizing the pension fund industry is no longer a secret. Pension funds do not have any option other than adapting to technology. This adaptation is revolutionary given […]
Making assumptions is an integral part of every financial calculation. It is a known fact that if the assumptions are modified even slightly, the numbers on the model tend to change dramatically. The problem is that financial modeler is forced to make several assumptions while creating the model. When several of these assumptions are being […]
Sporting franchises are often said to be confused about what their objectives should be. One chain of thought believes that since they are businesses, their objectives should also be financial in nature. This means that their objectives should also be about profit maximization or wealth maximization. On the other hand, there is a different chain […]
In the previous article, we learned about the three financial statements. We also learned how income statements and balance sheets are backward-looking financial statements. We also understood that the budget is the only forward-looking financial statement in the personal finance domain. It is the only statement that can be used to prevent economic mistakes from happening. This is the reason why a budget is given special importance in personal finance studies. Individuals who are highly successful in managing their personal finances attribute their success to budgeting techniques. However, there are many personal finance experts who criticize budgeting techniques as well. In this article, we will have a closer look at the advantages and disadvantages of budgeting.
The bottom line is that a budget is an important tool that can be used in the process of financial planning. However, its usefulness is subjective. Some investors derived a greater value from the budgeting process than the others.
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