What is Financial Planning???

Financial Planning is the arrangement of your asset to achieve you financial goal.

Most people have the misconception that financial planning is all about insurance. In fact insurance only account approximately 20 to 25% of the financial planning.

There are generally 4 sectors of financial planning

1. Wealth Accumulation
2. Wealth Management
3. Wealth Distribution
4. Wealth Protection

There are several objective of Wealth Accumulation Planning

1. To fully paid up a residential property
2. Manage expense and minimized loan
3. Increase saving
4. Invest your savings to grow your wealth

As your wealth grows, you will need to do Wealth Management Planning
The objective is to

1. Asset Preservation
2. Diversify risk
3. Achieve a decent rate of return for your investment

To reduce your investment risk, you can allocated your saving into different type of financial assets

1. Low risk cash deposit and endowment plan (2 to 4%)
2. Medium risk financial product like unit trust (5 to 7%)
3. High risk like stock and share (>7%)

You must put in place a Wealth Distribution Plan once your wealth is properly managed and growing. The purpose is to protect & transfer your asset without facing potential pitfalls & inconveniences in the event of your death. For example, you can

1. Writing a will
2. Nomination of your CPF
3. Nomination of your Insurance Policies
4. Creating a Trust to distribute your asset to the right people at the right time

Do you know that there is one important factor is critical for your success of your Wealth Accumulation, Wealth Management and Wealth Distribution Planning? It is time! Given Time, you will be able to realize your earning ability and succeed in your financial plan.

1. What if you run out of time?
2. What will happen to your earning ability?
3. What if you are no longer around tomorrow?
4. What will happen to your financial planning?

Would you consider a fool proof plan that is independent of time?
A fool proof plan that will succeed with or without time.

To ensure your success, you need looking to Wealth Protection Planning. The propose is to ensure your income, health, asset and liability by converting part of your monthly earning ability before you run out of time

Is your existing financial plan comprehensive and fool proof?

Which of the 4 areas that you would like us to begin with?
Is it Accumulation, Management, Distribution or Protection?

If you would like help in your decision I would be glad to help…(65)9746 3061

Regards,

Kannan (AFP)

HP : (65)9746 3061

How To Save Money

The common questions among people these days is how to save money in such a tough financial enviroment. If you are one of those who ask this same question, this article is for you.

Saving money is a daunting task. It is easy to say “I am going to save money from now on”. Unfortunately, not all who promised such was able to make it come true. There are challenges along the way. And such challenges had proven to be extremely tough. Hence, the issue of how to save money is a real challenge.

One of the basic ways to save money is to create a reasonable objective. Make sure you control your expenses. And make sure you get good value for your money. By getting good value of your money, it means not wasting your hard earned dollar for a low rate product.      

But then, it also means that you should spend your money for items that you really need. Bear in mind that spending is not dependent on a whim. It is according to needs. Hence, when buying a product or service, ask this question to yourself. Do I need this product or service? Or do I just want it and might not get what I pay for?

If you want to save money, make sure you have a goals. You need to have both a short term and a long term goal. For instance: I want to be able to start a small business a year from now. The capital should not be a overly large amount since you will start with a small business and grow it over time.

The first step is to identify your business and compute how much is the capital that you will need in order to start with your business. The figures that you will come up with should be based on a thorough feasibility study. Avoid hunches or guessing. Once you come up with your capital, record it. That amount of your capital is going to be your target or goal.

If you want to raise your capital in one year period, compute how much you must save in 12 months. Saving on a monthly basis will be easier. You should set a realistic goal and expectation. Your current income should be able to sustain your monthly saving.

What if you can not afford the amount for the monthly savings?

You should adjust if you can not sustain the monthly target. One alternative is to lengthen your time frame. Make your target 1 ½ to 2 years if necessary.

Start to make your adjustments as well. Trace and take note of your expenses. Keep a notebook and write them down. Make a detailed notation of your every day expenses. Do not leave even the smallest detail. Most often than not, there are expenses that are not really necessary. And usually, this shabby item carries the most weight out from your expenses. You should be able to determine what is important and which are just whims.  

Examine your expenses and determine those that you could possibly remove from your expenses. For instance: Do your own manicure instead of going to a salon. Check your utilities like cables or satellite TV. If you could settle for regular cable and cut the HD access, it could add a few dollars back to your pocket.

How about the paid channels that you are not really watching? Why pay for those that you are not really watching in the first place? Further, conserve energy by turning the lights off if they are not being used. Bottom line is to make sure you are really using the items and the utilities that you are paying for.

Create your budget list. Having a budget helps you to control your expenses. There is going to be lesser chance of over spending. Also, you will be mindful of what you are spending because your spending money is set at a certain limit. A budget can also make sure that what you surchase is only those things that you need.

Saving money will take a proper and accurate evaluation of your current financial capabilities versus your future aspirations. It is important that you can balance the two in order to be able to make the most out of what you have now.

Think about this, saving money can ensure that you are secure in your future. It helps you to really think about your current and future financial situation. Through this type of thinking, you will no longer find the issue on how to save money a great challenge.

Why Is Saving So Important?

We save, basically, because we can't predict the future. If we could, we would know precisely how much money we would need for the things that we want and need in the future. But because we can't do this, the need to save money for the future is vital.

Think about these few reasons why:

Emergency cushion - This could be any number of things: a new roof for the house, out-of-pocket medical expenses, or a job layoff and sudden loss of income. You'll need money set aside for these emergencies to avoid going into debt to pay for what you need.

Retirement – If you intend to retire someday, you'll probably need savings and/or investments to take the place of the income you'll no longer get from your job.

Average Life Expectancy – With more advances in medicine and public health, people are now living longer (and needing more money to get by).

Volatility of Social Security – Social Security was never intended to be the primary source of income and should be treated as a supplement to income.

Education – The costs for private and public education are rising every year, and it's getting tougher to meet these demands.

Without money put away in savings and/or investments, you may open yourself up to other risks as well. For example, not having enough money to pay for emergency dental care may force you into taking a loan that your savings might otherwise have covered.

Saving Money for Living the Luxury Life

There are a host of millionaires and billionaires in the world today. Some of them won the lottery, others were successful in business, and a few inherited their wealth from family. Regardless of the method, one can become financially independent overnight or over decades. While luck may play a big role in how some make their money, it takes another skill entirely to keep it. Financial planning is an essential skill necessary to have money for future plans to live in the lap of luxury.

 

How To Save Money

1. Saving money is an important activity that helps to make one's future bright. Many learn bad habits of managing money from family members and these practices carry on into adulthood. To build a healthy and stable future, saving money is fundamental and making it a priority is the first step to making one's millionaire status a reality. Here is a simple guide for novice savers to utilize as a means of jump starting their financial health.

The first step to saving money is to decide that it needs to happen. Making financial health a matter that is as important as physical, emotional, and spiritual health will put one's mindset in the right place for making positive changes and a happier bank account.

2. Learning how to save money is one of the most important preparations for your financial future. And while saving money isn't always the easy thing to do, it isn't impossible. It takes determination and dedication, but you CAN do it, and the earlier you start, the better off you will be in the end.

While the idea of setting aside a portion of your income for a rainy day is an appealing idea in theory, in reality most people find it hard (if not downright impossible) to develop and stick with a responsible savings plan. But while it may take a good deal of commitment and sacrifice for you to reach your personal savings goals, the financial benefits that can come from a robust savings plan far outweigh the short-term cutbacks that you may have to endure.

Why You Should Save
While the benefits of saving money may seem obvious (MORE MONEY!), there are a number of advantages to having a healthy savings plan that you may have not considered such as:

• emergencies – unemployment, disasters, bad investments, illness can occur and it’s nice to be prepared for them;
• debt prevention – paying cash as you go instead of running up high-interest credit cards, is more efficient and saves lots of money; and
• planning for the future – money for your children’s education, a new car, or retirement can cost a lot of money which a good savings account or investments can help you pay and lessen your loan obligations.
  

So, if you're ready to start saving money, hopefully the following tips and suggestions will help get you started on the path to financial responsibility.

Common Mistakes With Regards To Financial Planning

(Source: Certified Financial Planner Board of Standards)

• Do not have measurable financial goals

• Make financial decisions without understanding their effects on other financial issues

• Neglect to re-evaluate their financial plan periodically

• Look for a quick financial fix instead of a long-term strategy

• Expect unrealistic returns on investments

• Think that financial planning is only for the wealthy

• Think that financial planning is only necessary when they get older

• Confuse financial planning with investing

• Think that financial planning is primarily tax planning

• Wait until a money crisis occurs to begin financial planning

• Think that using a financial planner means losing control

Benefits of Financial Planning

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Benefits of Financial Planning

If you're like most people, your daily life is focused on your immediate needs and those of your family. You may think about the future, but the thought may be just a passing one, as day-to-day concerns like work, errands or taking the kids to Little League practice take up most of your time.

One day your children will leave home and have lives of their own, and you may want to stop working.A financial plan can help you prepare for these events and the others that will inevitably occur, whether you anticipate them or not.

How can a financial plan help?

A financial plan can help you:

Assess your financial situation by helping you track income and expenses, establish an emergency fund, and determine your overall net worth.

1.Save for major expenses like funding a child's education, buying a house or car, or developing a cash reserve for special occasions like weddings and vacations.

2.Plan for your retirement by estimating your retirement income and expenses and the value of government programs. Then you can begin to determine the amount you need to save to meet your retirement goals.

3.Assess your risk tolerance and develop an asset allocation strategy.

4.Plan to reduce your taxes, project the effect of income taxes, and develop a tax-deferred strategy.

5.Protect you and your family against financial crisis should you become disabled or die.

6. Plan your estate to ensure your assets are distributed the way you desire, fund estate taxes, and minimize their effects where possible.

Finally, a financial plan can give you a clear picture of where you are, a strategy about where you are going, and peace of mind about your future. It's never too early to start.