Introduction to Financial Planning
Financial planning is a comprehensive approach to managing finances. It involves setting long-term goals, analyzing current resources, and developing strategies to achieve financial stability.
Unexpected Inflation Insight
Did you know? Even a low inflation rate of 3% can erode 50% of your purchasing power in just 24 years. Planning for inflation is crucial in maintaining your financial health over time.
Rule of 72
The Rule of 72 is a simple way to estimate how long an investment will take to double, given a fixed annual rate of interest. Divide 72 by the annual interest rate to get the approximate number of years.
Power of Compound Interest
Albert Einstein called compound interest the 'eighth wonder of the world.' It can grow your wealth exponentially. For example, a $1,000 investment at 8% interest will grow to over $21,000 in 50 years.
Emergency Fund Importance
An emergency fund acts as a financial safety net. Surprisingly, 40% of Americans can't cover a $400 emergency expense. Having 3-6 months' worth of expenses saved can prevent financial crises.Surprising Debt Statistic
Did you know? The average American spends almost 10 years of their life paying off credit card debt. Proper planning can help avoid this financial trap.
What is financial planning?
Managing short-term finances
Comprehensive long-term financial management
Setting short-term goals
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