Wealth Management Exam 1 – Fundamentals of Investing, Financial Planning & Risk
Management Mock Test
Bryon's Two Rules - correct answer ✔✔- Risk = Return
- Save early, safe often
Income vs wealth - correct answer ✔✔Income is money earned and wealth is all assets you
have minus all liabilities
Importance of Financial Plan - correct answer ✔✔- Helps manage the unplanned
- Accumulate wealth for special expenses
- Save for retirement
- Cover your assets
- Invest intelligently
- Minimize tax payments
Personal financial planning process - correct answer ✔✔Evaluate your financial health
Define your financial goals
Develop a plan of action
Implement your plan
Review your progress, reevaluate, and revise your plan
Evaluate your financial health - correct answer ✔✔> examine your current financial situation
> use careful record keeping to track finances and spending
> be honest and objective
Define your financial goals - correct answer ✔✔- Write or formalize your goals
,- Attach a financial cost to each one
- When will you need the money to achieve the goal?
- Analyze and revise your goals
Develop a plan of action - correct answer ✔✔- Flexibility
- Liquidity
- Protection
- Minimization of Taxes
Implement your plan - correct answer ✔✔- Stick to it
- Use your financial plan as road map to achieve goals
- Keep goals in mind and work towards them
Review, Reevaluate, and Revise - correct answer ✔✔> review progress
> reevaluate and revise for changes in your life
> be prepared to formulate a different plan to meet your goals.
3 Financial Goals - correct answer ✔✔Short term - within one year
Intermediate term - one to ten years
Long term - more than ten years
short term goal - correct answer ✔✔- Accumulate emergency funds that equal to 3 months of
living expenses
- Pay off bills and cards
- Purchasing insurance, major item, vacation
, Intermediate Goal - correct answer ✔✔- Save for child's college
- Home
- Home improvement
- Pay off major debt
Long term goal - correct answer ✔✔- Save for younger child college
- Create retirement fund
- Purchase retirement home
- Take care of elderly fam
- Start business
Life Cycle - Stage 1 - correct answer ✔✔Early Years
- Prior to 54
- Most costly decisions occur
- Develop regular savings pattern
- Cost of children + housing
Life Cycle - Stage 2 - correct answer ✔✔Approaching Retirement
- Transition year between 55-64
- Depends on preparation
- Reassess financial goals and decisions - retirement, insurance protections, and estate planning
Life Cycle - Stage 3 - correct answer ✔✔Retirement Years
- After 65, live off savings
- Move to less risky investment
- Consider extended nursing home protection
Management Mock Test
Bryon's Two Rules - correct answer ✔✔- Risk = Return
- Save early, safe often
Income vs wealth - correct answer ✔✔Income is money earned and wealth is all assets you
have minus all liabilities
Importance of Financial Plan - correct answer ✔✔- Helps manage the unplanned
- Accumulate wealth for special expenses
- Save for retirement
- Cover your assets
- Invest intelligently
- Minimize tax payments
Personal financial planning process - correct answer ✔✔Evaluate your financial health
Define your financial goals
Develop a plan of action
Implement your plan
Review your progress, reevaluate, and revise your plan
Evaluate your financial health - correct answer ✔✔> examine your current financial situation
> use careful record keeping to track finances and spending
> be honest and objective
Define your financial goals - correct answer ✔✔- Write or formalize your goals
,- Attach a financial cost to each one
- When will you need the money to achieve the goal?
- Analyze and revise your goals
Develop a plan of action - correct answer ✔✔- Flexibility
- Liquidity
- Protection
- Minimization of Taxes
Implement your plan - correct answer ✔✔- Stick to it
- Use your financial plan as road map to achieve goals
- Keep goals in mind and work towards them
Review, Reevaluate, and Revise - correct answer ✔✔> review progress
> reevaluate and revise for changes in your life
> be prepared to formulate a different plan to meet your goals.
3 Financial Goals - correct answer ✔✔Short term - within one year
Intermediate term - one to ten years
Long term - more than ten years
short term goal - correct answer ✔✔- Accumulate emergency funds that equal to 3 months of
living expenses
- Pay off bills and cards
- Purchasing insurance, major item, vacation
, Intermediate Goal - correct answer ✔✔- Save for child's college
- Home
- Home improvement
- Pay off major debt
Long term goal - correct answer ✔✔- Save for younger child college
- Create retirement fund
- Purchase retirement home
- Take care of elderly fam
- Start business
Life Cycle - Stage 1 - correct answer ✔✔Early Years
- Prior to 54
- Most costly decisions occur
- Develop regular savings pattern
- Cost of children + housing
Life Cycle - Stage 2 - correct answer ✔✔Approaching Retirement
- Transition year between 55-64
- Depends on preparation
- Reassess financial goals and decisions - retirement, insurance protections, and estate planning
Life Cycle - Stage 3 - correct answer ✔✔Retirement Years
- After 65, live off savings
- Move to less risky investment
- Consider extended nursing home protection
