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Contents
1) Personal Financial Planning
2) Achieving your dreams
3) Start planning
4) Financial Independence
5) Prudence
6) Prudence
7) Step 1:
8) Why should I budget?
9) Step 2:
10) Step 3:
11) Step 4:
12) DO IT NOW!
13) Building a Financial Safety Net:
14) Long-Term Disability Insurance
15) Long-Term Disability Insurance
16) Life Insurance
17) Emergency Fund
18) Summary
 
1) Personal Financial Planning
This is the proper allocation of your excess cash and savings in the right investment instruments to help you achieve various goals in life, such as buying a house, college education, starting a family and so on. The typical investment instruments which Singaporeans use are equities, unit trust, property, insurance and fixed-interest products.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
2) Achieving your dreams
Someday you would like to own a cafe, or a boutique, or do your MBA, or tour the world, or finally quit your job and start your own internet company. If you don't plan for these things, chances are they'll just remain dreams. You will never have the right resources to go about achieving them. The difference between someone who plans and someone who doesn't is that the one who plans, does, whilst the one who doesn't, just talks. You've met these people before. They keep talking about what they want to do, but they never do it. They keep having these little crises in their lives which they claim prevent them from doing what they want. So the first objective of planning is for you to take control of your life. You start to direct it in the way you want it to go, rather than for circumstances to control your destiny. You have goals to achieve, experiences to savour. At the end of your days, you want to be able to say that you have done these number of things, rather than say that you could have this, should have done that, and would have if only
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
3) Start planning
List down the things you want to do. Find out how much they cost, and embark on a mission towards achieving the right resources in order to be able to afford them. When your mind is focused this way, you start to be aware of every dollar that you spend and earn. Does it help you achieve your goals? You will have better control of your money, and not be left with very little at the end of every month, and wondering where it all went.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
4) Financial Independence
Can you imagine a time when you are no more a slave to money? When you can do anything you want at any time that you want? We call that Financial Independence, when you have enough tucked away to not worry about the major expenses in life. It's different from retirement. You may still continue to work if you enjoy it. But your have the resources to stop working anytime should you wish to. No debts to repay, no outstanding loans, and everything in the horizon needing money is more than covered for. Financial Independence is different for everybody. It really depends on your lifestyle needs. If you can be happy with a 4 room flat, you are likely to reach your Financial Independence sooner than if you have to live in a landed property. Financial Independence doesn't just happen. You have to plan for it. Those who do tend to achieve it sooner than those who don't.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
5) Prudence
In the book The Millionaire Next Door : The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William D. Danko, the authors discovered that the typical American millionaire does not fit the stereo-typical idea of a millionaire. Most of us would think that millionaires are characterized by their big houses and flashy Continental cars and expensive jewelry. But what the authors discovered was that most of America's millionaires were average people, living in average houses, driving American-made cars. They tend to have small businesses of their own, and their lives are characterized by long working hours and a high level of prudence in how they spend their money. That's how they amassed their fortune.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
6) Prudence
When the authors held a meeting for these millionaires, they found that catering caviar, and fine wine were totally wrong. When asked what kind of beer he would like, a millionaire said that there were only 2 kinds of beer that he drank. "Budweiser and free". So what our parents taught us when we were very young was right. If we worked hard and spent little, our chances of making it is a lot higher. If we constantly feel that we need a big car, a big house, and branded items in our lives, then we may forever be asset-rich, but cash-poor, and certainly a long distance off from financial independence. So in your planning, try to put in a good element of prudence. You will be 'free' from your 'enslavement' to money in a much shorter time.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
7) Step 1:
Identify and write down your financial goals, whether they are saving to send your kids to college, buying a new car, saving for a down payment on a house, going on vacation, paying off credit card debt, or planning for retirement.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
8) Why should I budget?
Controlling your financial affairs requires a budget. For many people, the word "budget" has a negative connotation. Instead of thinking of a budget as financial handcuffs, think of it as a means to achieve financial success. Whether you make thousands of dollars a year or hundreds of thousands of dollars a year, a budget is the first and most important step you can take towards putting your money to work for you instead of being controlled by it and forever falling short of your financial goals.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
9) Step 2:
Break each financial goal down into several short-term (less than 1 year), medium-term (1 to 3 years) and long-term (5 years or more) goals.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
10) Step 3:
Educate yourself! Read Money magazine, or a book about investing, or surf the Internet's investing web sites. The stock market is not voodoo. With a little effort you can learn enough to make educated decisions that will increase your net worth many times over. Then identify small, measurable steps you can take to achieve these goals, and put this action plan to work.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
11) Step 4:
Evaluate your progress. Review your progress monthly, quarterly, or at any other interval you feel comfortable with, but at least semi-annually, to determine if your program is working. If you're not making satisfactory progress on a particular goal, re-evaluate your approach and make changes
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
12) DO IT NOW!
There are no hard and fast rules for implementing a financial plan. The important thing is to do SOMETHING, and to start NOW.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
13) Building a Financial Safety Net:
Building a financial safety net to prevent financial disasters caused by catastrophic illness or other personal tragedies.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
14) Long-Term Disability Insurance
Long-term disability insurance helps replace your income if you are unable to work due to illness or injury. Many people consider this coverage a luxury, when in fact, it should be considered a necessity for those who don't have other financial resources they could tap in the event of an illness or injury. Even if you do have other financial resources, would you want to use them to pay your monthly bills? If you saved 5% of your income each year, a 6 month disability would eat up 10 years of savings!
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
15) Long-Term Disability Insurance
Don't think it could happen to you? Although your chances of having a disability increase as you get older, illness and injury can happen at any age. Car accidents, sports injuries, back injuries, pregnancy, and disease are just a few examples. Ask yourself this question: could you live without your income for three months? Six months? A year? If the answer is no, you need disability insurance. Employers often offer this coverage via a payroll deduction, which may be tax-deductible.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
16) Life Insurance
Life insurance is necessary if you have dependents who will suffer financially if you die (children, for example). If you have no financial dependents, it's probably not necessary, although many people also use insurance as part of their estate planning and cash accumulation regardless of their dependent status. If you plan to buy insurance other than term insurance provided by your employer, you should educate yourself about the pros and cons of term, whole life, and other types of insurance. You may also want to talk to an adviser about how much insurance is enough. The Investment FAQ Web site explains how to determine your life insurance needs.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
17) Emergency Fund
Financial advisors suggest having enough savings in an easily accessible account to cover your living expenses for six months in the event of illness, job loss, or other serious emergency.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 
18) Summary
Once you've protected your income-generating ability with disability insurance, protected your dependents with life insurance, and protected your other assets by having a six month emergency fund, your financial safety net is in place and you're ready to turn to the task of accumulating wealth.
Useful link -  http://financialplan.about.com/library/weekly/aa032899.htm
 

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