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some new investments the afternoon before he died. His death was a shock to everyone. Even had he wished to do so, he had no time to prepare Joan for her new responsibilities.
Joan’s lack of exposure to investments is, unfortunately, common. Joan (and others like her) would have been better prepared for widowhood had she been a partner in planning for her family’s financial future. A couple should share in financial planning because it involves the family as a whole.
Financial planning should start early. A couple should develop a detailed financial plan and review it at least every five
Whenever possible, Roger Granum years. When circumstances change sig- prefers to include both husband and nificantly—the birth of a child, retire-
wife in financial planning. ment, changing investment goals—a new
detailed financial plan should be developed. If assets are limited and financial goals are long-range, financial planning
The first time I met Lee’s wife was a week after I read his obituary in the local paper. Joan sat across the table, hearing for the first time about Lee’s investment portfolio, which represented a substantial portion of their net worth. Not once in nearly 40 years of marriage had Lee, a devoted husband and an astute investor, “bothered” Joan with the details of his investment decisions. Now the responsibility was hers, and to obtain investment advice she was totally dependent on someone she didn’t know.
Lee always had been the picture of good health and was an active outdoors- man. He had been in my office to discuss can be relatively easy. As assets increase and financial goals become more coni' plex, professional advice may be needed-
Financial planning gives a couple the opportunity to take stock of their assets and liabilities and to think ahead to whet® they want to be financially 15, 25, or i years later.
Where should a husband and wte begin? One of the simplest ways is to ca culate your net worth. You may wish t0 use an application for a home mortgage’ as it asks for most of the data needed; (See August 1987’s “Money Matters for more information on calculating y°ur net worth.)
When a couple determines their n worth for the first time, they may b pleasantly surprised at the value of the assets. Obviously, not all of your curred net worth is available for investing- y investment purposes, net worth include only discretionary assets—those that cad readily convert into cash and that are d° essential for day-to-day living. Geder ally, your home, home furnishing*’ clothing, and cars are not discretional assets; savings accounts, stocks, bond • rental property, boats, and the cash vaU_ of insurance policies are. Your home ^ equity may or may not be considered discretionary asset. If you intend to s® your home, you might use part of equity for income-producing financ'd assets. Under certain circumstances, y may obtain a home equity loan to P** chase securities, but their use for sue*1 purpose is not recommended. TyPlC uses for home equity loans are to ret high-cost credit, make home impr°v^ ments, invest in real estate, and start expand a business.
After a couple assesses their curr net worth, they should develop a cay flow worksheet to help put income a expenses into perspective. Next month- will offer some suggestions about • procedure.
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Proceedings / February