PERSONAL FINANCIAL PLANNING 2013 [PART ONE]

Home Truths

·         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.

•      Investments.

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.

Ponder This?

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.