It is a process of considering of financial needs and objectives of a person. Most of the people thought that financial planning is only for the rich people, some may think that is selling an insurance products, or a process to get rich or i am not rich no need for me to do financial planning.
For me, Financial Planning is a process to achieve personal financial objectives and goals. It is just like when we would like to go for a vacation then we will do some preparation such as where to go (destination)and places going to visit, what to bring?, costing and budget, which hotel to stay?, How many day? and etc.
The major components of financial planning are;For me, Financial Planning is a process to achieve personal financial objectives and goals. It is just like when we would like to go for a vacation then we will do some preparation such as where to go (destination)and places going to visit, what to bring?, costing and budget, which hotel to stay?, How many day? and etc.
1. Wealth creation
2. Wealth protection
3. Wealth accumulation
4. Wealth distribution
In general, financial needs and objectives for a family are;
Basic need : clothing, food, home
Family need : Children education, medical expenses, House
Social need : Vacation, car, children's marriage, entertainment
Old age need : Retirement expenses (depend on what type of lifestyle),
healthcare expenses, wealth distribution
Questions come across my mind;
How much money do i need for my retirement? What type of retirement lifestyle i want? How much money do i need for my children education? What will happen if something unfortunate happen to me? Who are going to take care of my family obligation such housing loan, car loan, credit card, family living expenses & etc? How do i pay my medical expenses when i have no income or when i am a liability to the company?
The "Chicken Story"
When i was in primary school, few months before Chines New Year or Festive Seasons, my mother will bought few chics to rear (each cost between 80 cents to RM1) and cooked it during Chinese New Year or Festive Seasons. However, when i was in secondary school, my mother will bought chicken from the cold storage shop during festive seasons. What happen now? I can buy chicken from the restaurant, food court or KFC whenever i would like to eat chicken. How much it cost? what will happen 5 years from now?
For me, we are spending our money much more faster than before as more and more channels for us to spend our money such as Chinese New Year Sales, Hari Raya Sales,Stock Clearance Sales, Year End Sales and etc. In addition, we are also can buy furniture and electrical appliance by instalment or credit card or salary deduction. We can buy hand phone by using credit card, pay our utilities bills by credit card also and etc.
I still remember, when i was in secondary school my father bought a 14 inches television (black and white) cost RM500 and he need to pay cash. Now, we even can drive away a vehicle (certain brand) without paying a deposit, full loan.
The "Chicken Story"
When i was in primary school, few months before Chines New Year or Festive Seasons, my mother will bought few chics to rear (each cost between 80 cents to RM1) and cooked it during Chinese New Year or Festive Seasons. However, when i was in secondary school, my mother will bought chicken from the cold storage shop during festive seasons. What happen now? I can buy chicken from the restaurant, food court or KFC whenever i would like to eat chicken. How much it cost? what will happen 5 years from now?
For me, we are spending our money much more faster than before as more and more channels for us to spend our money such as Chinese New Year Sales, Hari Raya Sales,Stock Clearance Sales, Year End Sales and etc. In addition, we are also can buy furniture and electrical appliance by instalment or credit card or salary deduction. We can buy hand phone by using credit card, pay our utilities bills by credit card also and etc.
I still remember, when i was in secondary school my father bought a 14 inches television (black and white) cost RM500 and he need to pay cash. Now, we even can drive away a vehicle (certain brand) without paying a deposit, full loan.
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