Lesson 3-The economy affects personal

financial success
1. List individual factors that strongly influence financial thinking.
FAMILY STRUCTURE, HEALTH, CAREER CHOICE and, AGE.

2. Discuss how income, income needs, risk tolerance, and wealth are affected by
individual factors.
Income, income needs, and risk tolerance is affected by “family structure”
because a family providing their needs in everyday life and also the expenses is
increasing day by day for example by paying for children’s education. Likewise
“health” is also affected the personal financial planning the expected income
needs and risk tolerance because of unexpected risk like accident, chronic illness
etc. so you need to protect yourself but it may increase in costs. Moreover
“career choice “affects income and wealth or asset accumulation or the financial
planning because of different expenditure, especially through educational
requirements, income potential, and characteristics of the occupation profession
you choose. Sources of income, asset accumulation, spending needs, and risk
tolerance affected by “Age” and stage of life because an individual needs,
desires, values and priorities is all change over a lifetime and financial change
accordingly. Whenever someone grew up your career progresses, income
increases but so goes spending. So commonly, your capability to assume risk is
high because of your accumulated assets, but your willingness to assume risk is
low, as you are now dependent on those assets for income. As a outcome, risk
tolerance decrease’s: you are less concerned with increasing wealth than you
are with protecting it.
 FAMILY STRUCTURE affects the relationship status and dependents such as
children, parents, or siblings determine whether you are planning only for
yourself or for others as well.
1. HEALTH affects income needs and risk tolerance.
2. CAREER CHOICE affects income and wealth or asset accumulation.
3. AGE affects sources of income, asset accumulation, spending needs, and
risk tolerance.