Write a financial plan on your own

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Like everything in life, you need a plan to be successful. This also applies to your personal finances. No one is completely secure financially unless you have accumulated millions of dollars and decide to live on a nest egg for the rest of your life.

Unfortunately, for most people, they are not prepared for retirement. Financial planning is crucial to achieving your comfortable retirement goals. But that being said, how can you write a financial plan without any formal education?

Below is a quick, step-by-step guide to writing your own financial plan. Of course, a professional financial planner may be able to give you a more complete financial plan, but it will be a good step forward in understanding your needs and removing some obstacles.

1. What are your goals?

Don’t be afraid to dream – you only live once. Think about the size of the house, your education, your family, etc. Just write down these thoughts on how you want the future to look. Once you’ve listed your ideals, don’t forget to factor in the mundane issues like child rearing, insurance, etc.

Your goals should include:

* Education. Regardless of your age, additional education and training is necessary to change careers or to develop yourself. Many people take college courses (even with teens) or move on to an MBA to move up the corporate ladder. Even if college is for you, you should still plan for your children’s college graduation, unless you intend to leave them to their own devices.

* Career. What field do you want to work in? Is it creative work or a typical 9-5? Or do you want to be your own boss? Do you want to create multiple sources of passive income?

* Way of life. Is work or family more important? Are you struggling with a “simpler life?” »Do you want a Porsche or a BMW? Do you want to live in a private mansion, a house by the sea, etc.? Do you have expensive golf hobbies? All of this costs money, so calculating expenses and matching them to your income is necessary to achieve your lifestyle goals.

* Retirement. Don’t forget about retirement. This is a time when you lose your income. So how do you live in retirement? Are you going to downgrade your home, live with your kids, or move to a retirement community?

* Assurance. Nothing is safe in life. You need to be insured for the worst case scenarios. Any financial plan should include insurance provisions.

These goals may seem daunting, but they don’t have to be wishful thinking. The actual money set aside could be far less than you think, if effective financial planning is involved.

2. Plan your income

Of course, your financial plan isn’t just about your dreams. How are you going to pay it? Guess you don’t have a sugar daddy, so you should be following a professional life. Most people have their career paths mapped out in this format – going to college, getting a job, working hard to climb the ranks, and retire.

There is nothing wrong with race except that there is great uncertainty in today’s globalized environment. People change jobs all the time due to layoffs or to look for new challenges.

Instead of a day job, you can consider starting a business or becoming self-employed to sell your skills. Business isn’t just for those with money, MBAs, or connections. You can start a home business to handle lawn care, earn money online with a website or vending machine business.

Besides becoming your own boss, you can find other income through network marketing or investing.

Investing is effective in generating secondary income because it simply increases the money you already have. You can buy gold, stocks, bonds, real estate, etc.

Whether you are a business owner or an employee, you shouldn’t be leaving your money idle under your mattress. Even putting your money into an online savings account is more profitable.

3. Write your financial plan

Basically, a financial plan is a permanent budget. You will not only be budgeting for your next paycheck, but your entire life. Planning involves knowing how and when you will get there. There are no hard and fast rules.

You must be rational enough to assess your current situation, creative enough to see what is possible, and have the integrity to carry out the plan. Remember, just because it’s written doesn’t mean it will happen – you have to decide to go all the way and achieve your goals.

Start by doing the following:

* Chronology. Determine where you want to be in five years? Ten? Thirty? Fifty?

* Research the necessary costs. Your current “bills” plus 5% inflation per year. Remember to factor in life insurance, health insurance, auto insurance, etc.

* Search for luxury costs. What do you want to do. Cruises, nice cars, nice house, etc.

* Plan the income strategy. For most people, they start with wages. But remember that your job is not your only source of income. Starting a side business, earning a hobby, or even making money online are viable options for additional income.

* Plan investments. Investing is simply a must to fight inflation. You can invest in anything. Just make sure you know what you’re doing and don’t put all of your eggs in one basket. As we age, financial security should become more and more important.

Try to factor in all possible costs and revenues. Anytime you are unsure of the numbers, be careful. Also remember that a financial plan is ALWAYS about your goals. It’s not just about money – it’s about getting what you want out of life. Money is just a tool.



Source by Barry Ritz

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