· Whether you are tired or not, you will retire or be retired from your job.
· Whether you want to or not, you will grow old & feeble if you live long enough.
· Whether you want to or not, your family, relatives and friends will need your financial support.
· Whether you like it or not, you will either live under a roof or under the skies; you will eat whatever you have to eat and wear whatever you have to wear.
· Whether you like it or not, nobody can love you more than you love yourself.
What is Personal Financial Planning [PFP]?
• A committed interest in managing your financial resources.
• Distinguishing between needs and wants.
• Making plans for satisfying your needs.
• Making provision for times of lack.
• Taking charge and responsibility for your finances.
• Foregoing current benefits for future benefits.
What Does PFP Involve?
• Pay yourself first by saving
• Educate yourself.
• Think Long Term.
• Give reasonably.
PFP Principles – Pay Yourself First By Saving
• This is indispensable! It is also the most difficult thing to do!
• Start with the “rule of ten” – Save 10% - 20% of your monthly income and work up as your earnings increase.
• Set up a Standing Order TODAY!
• Open a separate account (Savings or Fixed Deposits)
PFP Principles – Educate Yourself!
• Read financial pages, read books and articles on financial planning
• Talk to like minded people who inspire and challenge you.
• Deepen your skills on the job.
• Attend training programmes.
• Acquire new skills.
• Acquire new academic and professional qualifications.
PFP Principles – Think Long Term
• Raise financially responsible children
• Teach them early to learn to save and manage wealth.
• Don’t over protect your children from the valuable experience of lack - Raise them so they can compete and survive.
• Make investments for them in their names from an early age.
• Invest in the improvement of your children (and your spouse) educationally and professionally.
PFP Principles – Give Reasonably
• Give a Portion of your earnings to God (tithes etc.). The scriptures says there is blessing in giving.
• Set aside an amount as a monthly charity budget and ensure you stick to it.
• In Personal Financial Planning, where friends and relatives are involved, always practice restraint – give reasonably.
• Be careful when giving. You have a responsibility to your family as well.
Of 100 people who started working at age 25, by the time they were 63 years old:
• 63% were dependent on their off springs, relatives, friends or charities.
• 29% were dead.
• 3% were still working.
• 4% had accumulated adequate capital for retirement.
• Only 1% was truly “wealthy”.
• It is not how much you earn that matters but how much you can save and invest.