Core Points of Personal Financial Planning
Building a personal financial plan required lots of effort. Most of
the time, people even don't know where to start and what will be the
important points to keep in mind when planning their finance. In this
context, knowing the core have importance to not miss any major points
when one moving with her financial planning. Here is the core for
personal financial planning for your knowledge and update.
1. Pay Your Bills: Never hesitate or default to pay all your bills. It make you free from debt and losing money as penalty for making any late payments. Have a better practice of paying bills immediately after getting the same to your hand.
2. Be Debt Free: Debt always drag a person from building wealth. Remember, debt always increasing in a compounding manner and any of your investments or savings will be useless later, once if you have huge, increasing debts. The better advice here is, start saving or investing immediately after paying of all your debts and being a debt free person. If your investments and savings grow with a 10% annual rate but your debt increasing in a 14% annually, there is no point of saving any money at the end other than paying your debt later.
3. Build An Emergency Fund - I have posted various article in the past, emergency fund is a must requirement to any person who required to plan finance properly. An equal amount of your 6 months salary can be kept in a separate account will meet this requirement. This money will protect you from the occurrences of any emergencies, that can happen from any angle, simple or severe, in the future. Practice to not touch on this fund as it is only for your emergency requirements. Also, remember to build the amount to the previous level once after the fund used as full or partial, in the future.
4. Protect Yourself, Your Family and Major Assets: Have necessary protection through insurance from self, family and assets. Applying term policies, with an insurance equal to 6 to 8 times of your annual salary. This will ensure your family will be safe from financial burden in case you are not with them in the future, by happening anything bad to your life. Protect your family through enough medical insurance cover to escape from huge monetary requirements happening due to falling sick or accidents. Protect all your major assets using enough insurance. Home and valuables inside it, Vehicles, ornaments all should come under this insurance umbrella to avoid huge money loses in the future. Here is the guidelines to select worthy insurance.
5. Save and Invest For Future: Remember the golden rule of early saving. Early saving has major role in long term wealth creation. Money required time to grow but gradually. Have a practice of saving money from the day one of your job or business. Practice required money saving tips and methods to have secondary income than main. Power of compounding will come close to you as your best friend if start saving early. One should plan to save and invest majorly for for kids future and retirement. Anything others will come next than said as a secondary goal from these two main goals. Here is an interesting article says 'Making more money does not guarantee financial stability'
Above 5 are the core of personal financial planning. Even though, a person still required to have some soft skills to be succeeded. Common sense plays important roles all over the financial world. Skills to analyze things are most important. Also, it is must to provide good knowledge to your kids about money and teach them to build a right habit of saving than spending. Never loose temper at any stage of your financial planning life but, required to face any issues with patience and prudence.
Insurance: A Guide
"Remember kids, I have life insurance" - Adam Savage
This is a guest article from Tatyana Levin
These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).
The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.
A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed. But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.
Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.
These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason. The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.
The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.
About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com
1. Pay Your Bills: Never hesitate or default to pay all your bills. It make you free from debt and losing money as penalty for making any late payments. Have a better practice of paying bills immediately after getting the same to your hand.
2. Be Debt Free: Debt always drag a person from building wealth. Remember, debt always increasing in a compounding manner and any of your investments or savings will be useless later, once if you have huge, increasing debts. The better advice here is, start saving or investing immediately after paying of all your debts and being a debt free person. If your investments and savings grow with a 10% annual rate but your debt increasing in a 14% annually, there is no point of saving any money at the end other than paying your debt later.
3. Build An Emergency Fund - I have posted various article in the past, emergency fund is a must requirement to any person who required to plan finance properly. An equal amount of your 6 months salary can be kept in a separate account will meet this requirement. This money will protect you from the occurrences of any emergencies, that can happen from any angle, simple or severe, in the future. Practice to not touch on this fund as it is only for your emergency requirements. Also, remember to build the amount to the previous level once after the fund used as full or partial, in the future.
4. Protect Yourself, Your Family and Major Assets: Have necessary protection through insurance from self, family and assets. Applying term policies, with an insurance equal to 6 to 8 times of your annual salary. This will ensure your family will be safe from financial burden in case you are not with them in the future, by happening anything bad to your life. Protect your family through enough medical insurance cover to escape from huge monetary requirements happening due to falling sick or accidents. Protect all your major assets using enough insurance. Home and valuables inside it, Vehicles, ornaments all should come under this insurance umbrella to avoid huge money loses in the future. Here is the guidelines to select worthy insurance.
5. Save and Invest For Future: Remember the golden rule of early saving. Early saving has major role in long term wealth creation. Money required time to grow but gradually. Have a practice of saving money from the day one of your job or business. Practice required money saving tips and methods to have secondary income than main. Power of compounding will come close to you as your best friend if start saving early. One should plan to save and invest majorly for for kids future and retirement. Anything others will come next than said as a secondary goal from these two main goals. Here is an interesting article says 'Making more money does not guarantee financial stability'
Above 5 are the core of personal financial planning. Even though, a person still required to have some soft skills to be succeeded. Common sense plays important roles all over the financial world. Skills to analyze things are most important. Also, it is must to provide good knowledge to your kids about money and teach them to build a right habit of saving than spending. Never loose temper at any stage of your financial planning life but, required to face any issues with patience and prudence.
Insurance: A Guide
"Remember kids, I have life insurance" - Adam Savage
This is a guest article from Tatyana Levin
These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).
The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.
A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed. But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.
Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.
These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason. The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.
The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.
About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com
