Financial Planning 5 Steps
Financial planning is important if you want to retire early and retire rich. It is just like your travel planning from destination A to destination B. There are several ways for you to reach there which have pros and cons on each of them. Same apply to financial planning. The important is you need have the blue print in your mind how to achieve your goal.
Below are 5 steps of financial planning. Each of them are equal important.
1. Assessing where you are now in financial
You must know how is your financial, positive net worth or negative net worth. How much asset, cash and debt do you have. List out everything to have a clear portfolio.
2. Setting goal
Once you know where you are financially, set a goal for yourself. You can set up goal like paying off your debt in 3 years. You can also set your net worth after 5 years.
3. Create a financial plan
After you have your goal, you need to have a plan to make your goal become real. Plan the investment vehicles you want to use in order to achieve your goal, stock, unit trust, real estate or starting a business as well.
4. Implement your plan
You have your goal and your plan, now you have to implement what you have plan for. Do as you plan. Do not give reasons to not implement and do not procrastinate.
5. Monitoring and reassessing your plan
The final step come to monitoring and reassessing your plan. You need to monitor your investment to make sure it is suitable with you. If you have low risk, don’t venture in highly volatile stock market. Assess your plan by viewing your return of investment whether it is a nice vehicle for you to achieve financial goal.
As stated earlier, 5 of them is equal important. So pay full attention to each of them. One can only success if they have a good plan to achieve their goal. Start your financial planning now before too late.
