Financial Planning
Strategic Financial Planning workshop
Financial Planning: The Real Benefits
Article by Luigi_H
Planning is a basis of every activity you undertake in your life. Whether it a routine job or a year long project for its systematic and timely execution you have to plan for it well in advance. Planning is an integral part of our life and when it comes to financial matters planning is quite inevitable. Financial planning has various branches and stages that depend on the need of the individual. An ideal financial plan should incorporate short term gains as well as long term security. There are many factors that one has to consider while creating a proper financial planning and a well devised plan can reap unlimited benefits in future.
The basic and immediate benefit of financial planning is in having a controlled monthly budget. Having a well defined strategy regarding your monetary resources and its allocation among expenses, savings and investments will motive a family to stick to their monthly budget. In reality, a monthly budget is also a form of financial planning that defines your short term money flow. It allows you to verify your total income and compare it with monthly expenses. Random spending will never make an individual or family realize the importance of having savings. Meanwhile a monetary plan or budget helps in setting proper financial goals and targets that can be both long term and short term. Having such goals is very essential in order to avoid getting into the debts. For instance, if you have to buy a new home or to plan for the college expenses of your kid, you need to set a specific goal and start saving for it right from today. The earlier you plan for it, the lesser will be your financial burden as time passes by. This savings will also motivate you to plan for feasible investment opportunities. Hiring a financial agent to suggest suitable investment ventures can help you in having a more profitable saving.
The real benefit of financial planning is experienced whenever you are posed with some kind of unforeseen expenses or emergencies. Creating reserves for medical expenses, theft, accidents is an essential part of your financial plan. Securing timely insurance for all these emergencies can help you in reducing your financial liabilities in case of a contingency.
Having a proper plan motivates you to save and it improves your financial insight and knowledge. Your interest in financial security will lead to find new ways and means to increase your earnings. Adequate savings also gives you the option of investing in a private venture or business. Nevertheless, this is an option considered by every other common man under the current market scenario.
The final part of the benefits that you would reap from a properly executed financial plan comes during the time of your retirement. Your retirement plan is an important chapter of your entire financial planning. This will enable you to have a definite source of income after your retirement in the form of return from investments or savings account.
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century
Financial Planning – click on the image below for more information.
Financial Planning
“The seminal guide to the new morality of personal money management” (Los Angeles Times(on the first edition))
In an age of great economic uncertainty when everyone is concerned about money and how they spend what they have, this new edition of the bestselling Your Money or Your Life is an essential read. With updated resources, an easy-to-use index, and anecdotes and examples particularly relevant today-it tells you how to:
• get out of debt and develop savings
• reorder m
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century
Click on the button for more Financial Planning information and reviews.
Financial Planning question by Lawrence: How to write an original creative story using the 6 financial planning process?
1) Determine your current financial situation.
2) Develop your financial goals.
3) Identify alternative courses of action.
4) Evaluate your alternatives.
5) Create and implement your financial action plan.
6) Review and revise your plan.
Financial Planning best answer:
Answer by Ted H
Well, the financial part of the story is listed in your points. The creative part would be what you want to consider as financial goals. That part could actually be interesting, if you decide your financial goal is to buy an amazing car:
http://www.thesupercars.org/bugatti/bugatti-veyron/
Or build a tiny house. Check this link:
http://www.tumbleweedhouses.com/houses/xs-house/
Of course, your goal should probably be to be out of debt, but that’s not as fun! The creative part there could involve trading a red paper clip.
http://en.wikipedia.org/wiki/One_red_paperclip
56 of 57 people found the following review helpful:
Ok, but not great, November 26, 2009
By Sachmo –
This review is from: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century (Paperback)
The fundamental premise of this book is pretty good. The idea is as follows: You devote a given amount of time a day into work (say 10 hours). You earn an hourly wage, let’s say for argument’s sake it is $16 / hour. But there are many hidden costs associated with having a job. For example, you may spend 30 min. commuting to and from work. After you get back from work, you may spend an additional hour “decompressing” – as in mindlessly watching TV in order to relax. You may also spend maybe another 30 min. or so talking about your work situation to your significant other. So when you calculate your REAL hourly wages, you have to take all of this extra time into account. After all, you wouldn’t be doing all of this stuff if you didn’t work at this particular job. Also, there are monetary costs to working. Such as spending money on nice work clothing. Buying lunch in the afternoon, because it would be too time consuming to prepare lunch every night. If there are things that you might do yourself but don’t because of your job (taking care of your lawn, car, house, etc), you have to subtract the monetary costs of outsourcing all of this work. What the book points out is that your REAL hourly wage is often much less than you think it is. In the example above, $16/hour could easily fall to $10 or $11/ hour. The book then goes on to argue that when you start looking at stuff to buy – you should think about the cost of a new iPod for example in terms of hours spent working for it, not money. So for example, if you buy a $200 iPod, and you REAL hourly wage is $11/ hour, you’ve just spent about 18.2 hours of your life working away for that iPod. It really puts things into perspective. The book does not tell you not to spend, but rather to be conscious of what you are actually spending, which is literally your life energy. They have a “9 step program” but really it amounts to this: 1) Calculate your REAL net worth. All assets minus all debts. For many people its negative, because they have accumulated so much debt during their lifetime. 2) Become aware of your real hourly wage, and your spending patterns, and you will find that you naturally stop buying frivolous things. They recommend tracking EVERY single cent that you spend on goods. Pretty extreme, but I understand why. People in this program supposedly paid off seemingly large loads of debt in stunningly short time periods. That’s pretty much the gist of the book. The reason why I’ve given it 3.5 stars is because the manner in which this is all presented is not that great. The writing attempts to make the message seem very profound, when in fact it may not be so deep a truth as all that. There is also a *LOT* of negative generalization about how everyone lives an over-stressed, under-paid lifestyle and it keeps coming up, over and over again in the book. It’s this part that I really don’t like. It probably all together takes up maybe 75 pages of the book, and it really only needs to be stated once. I think some brevity could have made this book really amazing, but it is still ok. Finally, I strongly disagree with the investment chapter at the end of the book, and I think it will lead a lot of people astray. It recommends that you should only invest in long-term US treasury bonds that pay very marginal rates, because they are the only thing 100% guaranteed over time. A slightly “riskier” strategy is to invest in lifecycle funds. Let me state plainly that to invest in only US treasury bonds would be akin to shooting yourself in the foot. Many things (like your job), are not 100% certain over long periods of time, and by using some common sense and effort you can do MUCH better than treasury bonds by making wise choices with index funds, stocks, bonds, and real estate. Lifecycle funds are ok, but it is also perfectly ok to invest in stocks if you are willing to invest the time to do a little bit of research. “The Intelligent Investor” is the best book hands down for teaching you about stock selection and bonds, and I’d look there first if you are interested in learning about investing.
Help other customers find the most helpful reviews
Was this review helpful to you?
| Comments (4)
18 of 19 people found the following review helpful:
Great book, creative & motivating ideas., January 23, 2010
By Trinity the Voracious Reader (Santa Clara, CA, US) –
This review is from: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century (Paperback)
I got this book after reading in several blogs how good this book is. Now I know why. To start with, the nine steps mentioned in this book are: (1) Making Peace with the Past; (2) Being in the present – Tracking Your Life Energy; (3) Where Is It All Going? (The Monthly Tabulation); (4) Three Questions That Will Transform Your Life; (5) Making Life Energy Visible; (6) Valuing Your Life Energy – Minimizing Spending; (7) Valuing Your Life Energy – Maximixing Income; (8) Capital and the Crossover Point; (9) Managing Your Finances. You really gotta do the steps! Sure the steps take times and discipline to implement, but once I started, I got a lot out of it. Some of the shifts that I experienced: 1. A way of thinking that “money is simply something you trade life energy for”. Because I really want to know how much I trade my life energy for doing my job, I become very discipline in tracking my spending and created many new categories in my Quicken to be able to answer the the 3 Questions in step 4. 2. The attitude of “no shame no blame” when evaluating what one had done with one’s finance. The book mentioned many times this mantra that helped whenever I felt bad about my previous decision, I would tell myself “no shame no blame” and no regret (my own addition). 3. The hope of being financial independence. The step of charting and making life energy visible were very helpful. I am looking forward to the time when my monthly investment income crosses over with my monthly spending. The book gave examples of people who successfully crossed over this point which are very motivating. It is also realistic in saying that we may have set back because there is nothing guaranteed with investment, but if we are conditioned to have control over our spending and income, we would be more confident in handling the setback. This book is not an investment technique book, so if you are looking at a more technical way of managing your finance such as Asset Allocation by Gibson, you will not get it. This is also not like Needleman’s book (Money and the Meaning of Life) that is philosophical. This book I would classify it as a hybrid between the psychology of money and the pragmatic ways of managing money so that you can reach financial independence. For me, the shift in thinking that I got from reading this book, made this book very very worth it.
Help other customers find the most helpful reviews
Was this review helpful to you?
| Comment
8 of 8 people found the following review helpful:
Your Money or Your Life – One of the best personal finance books I’ve ever read, February 7, 2011
By James Ryan –
This review is from: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century (Paperback)
Your Money or Your Life is one of the best books I’ve ever read on personal money management. In Your Money or Your Life, money is introduced from a refreshingly new perspective. The book argues that you are currently making a “dying”, as opposed to making a “living”. A 9-step process is introduced to get you back on track toward living a fulfilled life through smart spending and financial independence. The basic premise of Your Money or Your Life is that life is too valuable to waste away working 40+ hours every week, one week at a time for the rest of your life… Just so you can have enough money to buy all those material possessions to keep up with the Jones’s. The book goes on to make an eye-opening connection between money and your personal life. Basically, you only have so many hours of life – which the book refers to as Life Energy – and the fulfillment we get out of life depends on how we spend those precious few hours. Most people trade a significant amount of their Life Energy in exchange for money to buy things – unimportant, unfulfilling, and at times even wasteful things. Your Money or Your Life goes through the exercise of having us determine the number of hours each of us has to work in order to make a purchase. The book doesn’t suggest budgeting, but instead uses the connection to force us to make conscious decisions about how we spend our money. You’re actually encouraged to spend money on the things that are meaningful and fulfilling to you. On the flip side, the book argues that you should reduce your spending as much as possible on the things that are meaningless to you. Any money you save from reducing your meaningless expenses should be invested toward early retirement. We are caught in a never ending trap… A sort of self-induced slavery. We go to work everyday to “earn” money, which we then trade for the possessions in our lives. Since our materialistic society has us brainwashed into always wanting more, we gladly accept a mediocre existence of wage slavery in exchange. The more money we make, the more we buy – more cars, bigger houses, bigger TVs, more cable channels, etc. And the more we buy, the tighter the chains becomes. It’s no wonder that we go through life in a walking daze. In summary, you trade Life Energy for dollars, which you then use to buy things. If you buy the things that are fulfilling to you, and minimize wasteful spending, your life will almost immediately become more enriched. More fulfilled. There is much more to this book than I’ve described, and it’s well worth the money. I believe this book is a must read for anybody who is serious about becoming financially independent and living a fulfilled life. Your Money or Your Life. I chose Life. -James Ryan, PostponedLife com
Help other customers find the most helpful reviews
Was this review helpful to you?
| Comment (1)