Planning & Goal Achievement

Personal Financial Plan
"If you don’t know where you are going, no road will lead you there"

Steps of planning (Like planning for driving holidays)

1. Ascertain your current financial resources; (identify start point)

2. Define your financial goals; (determine where intend to go)
      - Distinguish long-term & short-term goals
      - Be realistic
      - Be specific & quantify goals in monetary terms.
         "to have a comfortable life" is not a useful goal. Not specific enough.
      - Set target dates for achieving goals
      - Prioritise Goals

3. Develop systematic financial plans; (choose route of travel from starting point to destination)
       - Money management plan, Saving plan, Investment plan, Liability plan, Housing plan,
          Insurance plan, Retirement plan, Estate plan.

4. Implement these plans; (start engine & drive off)

5. Monitor the results and revise goals and plans whenever necessary; (switch route if lost or not suitable)


Rewards of planning

You will achieve:
1. Better management of your financial resources (those five steps)
2. Improve your standard of living
3. Accumulate wealth over time.


The planning environment

To be successful in planning, it is necessary to understand their financial environment as well as the factors that provide them with income to invest.

The outcome of their financial plans depends on both their actions and the actions of others such as the government, other investors and financial institutions.

Understanding the unique characteristics of financial markets, financial institutions and policies of the government is critical in securing success in investment.


Personal Income

It take money to make money. Basic source of income  is wages. To understand the factors determine wages can manage them to enhance your earning capacity.

Three main factors:

1. Beginning of working career, income will be low. Rise to peak around 40 to 50 years old. Thereafter, income will tend to stagnate. You should incorporate the life cycle of your income into the planning process.

2. Education. Income increase with your level of education.

3. Career. Vocations that require special skills command higner income.


Fail to plan, plan to fail. Those who plan have an edge over those who dont.



.......read from PFP by Benedict Koh