The first thing you should start from, and most important, which is the basis of a personal financial plan – to determine your desires and aspirations with your financial goals. “What do you want?” – This is a very simple question, but curiously enough it is very hard to answer it. “I want to achieve financial freedom” or “I want to be rich” – is the right answer, but not complete. They should be concretized. If we are talking about “financial freedom”, then we should determine immediately how much money we should get from our investment, so that it can substitute for your salary and allow to live in clover, and don’t work. If we say we want to become rich, we should realize what these words mean for us, that is what we need to get to feel rich.
Of course, it’s all individually, for example, someone wants to retire at the age of 40 and go to the country to live there, and somebody wants to have a fortune of $1 million by the age of 50, have a good pension, capital issues, investments in property, account for current expenses in a safe bank, etc. Again: all very individual. With the right approach to making a financial plan, you can get quite a decent income for 10-20-30 years, i.e. income that does not require extra efforts from the client. How? This question must answered by the financial adviser.
But at the beginning try to answer the questions:
• At what age do you plan to stop working?
• What size monthly payment would you like to have?
• What tasks would you like to solve in the next 10-20 years?
Analyze the current financial situation.
Financial goals are set. Now it is important to assess your current financial situation correct. The plan begins with the analysis of what you have today. This is the analysis of your assets / liabilities, income / expenditure. Unfortunately, difficulties often arise at this stage, when you start drawing up a personal financial plan. Not everyone can say the exact amount of his expenses. How much does he spend on transport or on food? Typically, people spend as much as they earn. But it should be changed. For secure future investments are needed now.
Next, we need to evaluate those assets that we already have.
Write the following information in the plan:
- the amount of monthly income (point out the source and the date of receipt of funds);
- the amount of monthly expenses (point out the expense items);
- “good” assets, income;
- “bad” assets, nonearning assets;
- evaluate how efficiently you use your capital, and contact manager to make adjustments.
Determine how much you’re willing to assign to investing
- Analyze your current financial situation and determine how much you are willing to assign to investing;
- Use the rule “Pay yourself first”;
- Make it a rule to assign 10% of any received income to invest.
Thus, considering your capabilities, available starting conditions and willingness to take risks, you can calculate the possibilities to achieve the necessary financial goals.
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Search Google or other search engines for complete financial planning. Visit social networks and check the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.
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