What Elements Are Found in an Effective Financial Plan

question 22

Multiple Choice

What elements are found in an effective financial plan?

• A)Flexibility to allow for changes in your situation
• B)Sufficient liquidity to meet unexpected needs
• C)Insurance protection from catastrophic events
• D)Helps you legally reduce the amount of taxes you owe
• E)All of the above

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Definitions:

Investments

Assets purchased with the expectation that their value will grow or generate income.

Quarterly

Taking place four times a year, or every quarter.

Withdrawals

The act of taking money out of an account, fund, or similar financial vehicle.

Invest

To allocate money in the expectation of some benefit in the future, usually through the purchase of assets with the hope that they will increase in value.