Today's tenets of personal financial success (Proceedings)
Personal financial planning is the process of organizing your financial goals into a workable plan so that you can live with financial security in the style you desire. It involves proper handling of cash flow, assets, and liabilities. Financial planning is the way to get from where you are now to where you want to be. It brings the future into the present, while there's still time to do something about it. To quote Peter Drucker, "the best way to predict the future is to create it."
The planning process is straightforward
1. Determine what you have.
What do you want to achieve? Do you have short-term financial goals (e.g. eliminating credit card or other high-cost consumer debt, building an emergency fund, buying a car or home, starting a regular investment plan)? What about your long-term objectives? What are your lifetime goals? What must you accomplish in life? How do you enjoy spending free time? What are your hobbies? Are there hobbies you've not pursued, or that have gotten rusty from inactivity over the years? Visualize how you would spend time if money were of no concern. Where are you? What are you doing? Although each of us conjures up a unique picture, we often have many of the same thoughts:
Many people find their vision of the future is unrealistic, given their modest level of saving and investing. Many find they need to modify their expectation of the future. Although this process may be a bit humbling, it should not discourage you. It's far better to modify you expectations, and have an accurate picture of the future, than to have no idea whether or not your picture is feasible. If you remember nothing else, remember that it is never too late to begin. Start today.
What are the biggest threats to your future financial security?
Why doesn't everyone plan for their financial future? Common reasons given include
In fact, retirement planning is probably more critical for people with modest income than for the very wealthy. I'm sure we can all think of people in their 'golden years' that are not enjoying an idyllic existence. What's the good news? Each of us has the power and ability to profoundly influence our personal financial future. We can do something about it.