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Like a domino effect, when the economy fluctuates, so does our money.
And in turn, this means it will equally affect our financial planning.
Below are some specific wayseconomic changes can affect financial planning strategies.
Abid Salahi, finance expert and co-founder ofFinlyWealth, noted the same.
This move increased his annual returns by 12% compared to his previous strategy, said Salahi.
Salahi similarly agreed that job market shifts play a crucial role.
The rise of the gig economy has led to an increase invariable income streamsfor many individuals.
He said this trend requires more robust emergency funds and flexible budgeting strategies.
Salahi agreed that inflation is another critical factor when it comes to economic changes that can affect you.
Tax Policies
Tax policy changes can significantly impact retirement planning, said Salahi.
Technological Advancements
According to Salahi, technological advancements in fintech have also transformed financial planning.
The proliferation of robo-advisors andAI-driven financial toolshas democratized access to sophisticated investment strategies.
These economic shifts underscore the importance of adaptable, personalized financial planning strategies.
A one-size-fits-all approach is no longer viable in todays dynamic economic environment.
Market Fluctuations
Economic recessions or growths have an influence oninvestmentportfolios, said Rynsburger.
One can minimize risks through diversification and seize opportunities provided by market situations.
Overall, he said its crucial to remain informed and flexible.
Modification of various plans whenever theeconomic situation changesensures the proper achievement of long-term aims financially.
For expats, currency exchange rates are a critical factor.
This helps maintain purchasing power over time, especially for those relying onfixed income sourceslike pensions or Social Security.
That said, he equally noted that interest rate changes also play a crucial role.
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