One of the biggest aspects of planning for the future is the financial side of life. There are few people that truly understand how to plan for the future when it comes to their finances. There are many different factors that come into play when planning financial decisions out twenty or thirty years. Working with an investment bank that understands these different factors is a huge advantage to people that are working to plan out their future. Highland Capital by James Dondero has a lot of experience in working with their clients in planning out their future. Here are several things that must be taken into account by anyone planning their financial future.
Inflation is a measure of the increase in prices over a period of time. In general, inflation increases by a couple of percentage points each year. Anyone that is planning to retire must factor in inflation in anything that they do. The cost of living is going to be much higher several decades from now. People that do not take inflation into account when working their financial plans will underestimate how much capital they truly need. This is where the services of companies like Highland Capital will be so important to planning.
Rate of Return
The rate of return that can be earned on invested capital is another important factor to consider. In times of low interest rates, it can be difficult to earn a high rate of return without taking on a lot of risk. The current interest rates in the market are some of the lowest in history. Although this is good for borrowers, for people that are nearing retirement this can mean difficulty in finding high returns. Earning a high rate of return can make a huge difference in how long a specific amount of capital will last.
Another important factor to consider is future lifestyle needs of a person. For example, if a person is nearing the latter part of their life healthcare costs need to be factored in. Although most people plan on being healthy, there are many things in life that can cause a person to have ill health. Planning for an increase in these costs is just one example of future needs planning.
James Dondero is the President and founder of Highland Capital. He has done a great job in building up the business over the years to be one of the best in the industry. Over the years, Highland Capital has been able to help thousands of customers with their future financial planning. There are many different variables that must be considered in financial planning over a long period of time. Highland Capital is a great choice for people that want some professional help in this area.