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Guide to Investing
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Personal Financial Planning Approach to Investment Strategies
It is important to have a disciplined investment strategies because without a proper investment plan, you may end up with a portfolio of invesments you don't like anymore and aren't sure why you bought them in the first place. To understand the financial planning approach to investment planning, we must understand that investment of funds in different types of investments is only part of the overall personal financial decision-making and planning. Before investing,each individual should develop a master financial plan. Such a financial plan is based on your financial goals and objectives. As such proper investment strategies are developed from your financial planning. The financial planning approach to investment strategies includes the following criteria:
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KEYS TO FINANCIAL PLANNING#1
Invest with Goals or Plan
No financial plan or instrument can help you reach a goal that you have not defined. As such you need to think about your financial goals, in the short, medium and long-term. You goals might include saving for a deposit to buy your dream house or investing for retirement in 25 years time. When establishing your goals, it is important to quantify them. You can determine your particular needs by purchasing a financial calculator or speaking to a financial advisor who can quantify your goals. Your goal must have a time horizon require to achieve that goal. How much time you have to achieve that goal will dictate how aggresive or conservative you need to be in your investment strategy. Your time horizon will determine how much, if any, you still need to save. It will also determine how liquid your investment needs to be and how much volatilty you can tolerate.
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KEYS TO FINANCIAL PLANNING#2
Save more, Spend less- Retirement Financial Planning
Virtually all of us can and must save for retirement during our early career years and prime earning years. In retirement financial planning, with higher expectations, you might be interested to know a retirement nest egg is required for your dream retirement life-style if you are now 30 years of age and want to retire at age of 55. Few people have enough self-discipline to save for retirement. People often look ahead to an expected bonus, profit sharing, proceeds of real estate or another lump sum infusion of cash and promise themselves to put that aside for retirement. Then when the money comes, and the tax is paid, something invariably pops up - an overseas vacation, children's education expense, an unexpected car repair or home renovation, and more excuses to spend rather than save. We know that the longer you wait, the more you must save to accumulate the amount you decide you will need for you retire.
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KEYS TO FINANCIAL PLANNING#3
Appoint a Financial Advisor and Develop Your Master Financial Plan with Him
Investment and financial advice on the internet, television, newsletters and other mass media, provides information to the public quiet readily. the avilability of this informatiom has a lot of benefits, but it has encourged an ill-conceived impression that any person can easily learn almost everything a financial advisor knows. As a result, that person can make his own investment and financial plan and save in fees and commissions. it is important to know that there is a huge difference between a person who has read a financial magazine and a financial advisor in practice. You caanot acquire an experienced and competent financial advisors knowledge of investmetn and financial planning from the internet and magazines. It is undeniable that the information from various mass media can support an investor in their financial planning. However, such access to information should not eliminate the use of a professional financial advisior in deveveloping master financial plans.
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More on Financial Planning and Money Management
Financial Planning Tools
Personal Finance Budgeting
Wealth Management
Money Management
Retirement Planning
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