Saturday, January 5, 2008

Step 3 - Analyse the data and evaluate your present situation

As you, metaphorically, accelerate into a full-powered sprint for your (financial) life, it is the transformation of raw data into useful knowledge that propels you. It is here that your planner truly earns his remuneration. As he analyses your data, he gains insight into where you are, why you arrived there and your potential to achieve greater heights.

He will pin down your net worth and cash flow positions. Your risk tolerance can also be identified with the use of special tests. All this will help you understand yourself better; to know if you are risk averse, risk neutral or risk embracing.