How to create a personal financial plan?
"Personal financial plan" - such "impressive"serious words. Just imagine successful but slightly weary bankers to "clingy" look, business negotiations, the heavy leather chairs. And then - a holiday in the Maldives, private yacht ... and already seems to be casually thrown hear the phrase: "Oh, I'm so tired of this sun!"
Do you think that all this is very far away from you andcompletely unattainable? But is it? Chances are - you are wrong. You just want to very much. And you will come to the aid of a kind of "magic wand" - a plan. What is it and how to create a personal financial plan?
There are no secrets. Strictly speaking, it is a plan of action that you should take to achieve certain goals.
How it works?
Many people are living "paycheck to paycheck." Quite often, such an attitude toward money is based on the feeling of insecurity. And the truth - you never know what will happen tomorrow. And if today it is possible to buy some cute little thing, go to a restaurant or to go to an expensive resort, whether or not to deny yourself this? After all, will not work to save up for an apartment / villa / yacht, why limit yourself to minutiae?
But sooner or later there comes a time whenman begins to think about what will happen to them in five, ten, fifteen years. You have already asked yourself this question? And, the answer is to make you happy? If not, then it's time to think about their personal financial plan.
For how long should be a financial plan? It can be made at any time - six months, one year, five years - it all depends on what you're aiming for. Focus should be on the most distant goal. For example, if your task - to start 50 years "to live on the interest," and you are now 35, you need to make a plan for 15 years.
First and foremost, confidence in the future. You do not just start up your future to chance, and actively participate in its creation. Very soon you will begin to understand that the goals that previously seemed unattainable - is quite real. You will be able to organize their lives and begin to experience a sense of pride. Imbued with self-esteem and cease to be afraid of the future.
It sounds tempting? But how to create your personal financial plan? Start simple.
Of course, in order to start a strictly planned - and thus, in some limit - your life, you need a boost. What could be the motivation? Of course, the presence of target.
Each person is different. Everyone has different dreams and aspirations. And the level of income at all, too different. Therefore, the objective will be different. Imagine what would you like to reach, say, 15 years from now may be to buy a larger apartment? Or send the child to study in England? Or go to travel around the world? Do not be afraid to dream. However, your desires should be, after all, a bit of "tied" to reality.
Set specific time goals. For example, in a year you want to buy a car, five - an apartment, and a 15 - to begin to live exclusively on the interest of the capital, ie, start getting passive income.
Carefully review the list of goals and"Dreams" that you have made. You did it on paper, right? Determine that this is the most important, and that - minor. Make it easy enough.
Suppose you have two main tasks. First - to buy an apartment. The second - to 40 years have a passive income of $ 3000. Which of these is more important? Let's say you already have some shelter - even if not so, as you would like. And while you just panic fear impoverished old age. Then it becomes the main purpose of receiving passive income.
But if you have three children and did not have its own "corner", you are tired of living with their parents or to wander the rented apartment, then most likely it is the purchase of an apartment will be a major task.
The division into major and minor tasks will help you to understand what, in the case of the "failures" of your plan, you can donate, or what items should be adjusted.
Calculate the income and expenses
If you are up to this point has never led homeaccounting, you have to start right now. Before you create a financial plan, you need to find out where the "funneling" of your money. Very often, people's ideas about spending are far from reality.
Have you ever tried to calculate how much moneya month out, for example, the purchase of chewing gum? Or cake in the nearest cafe? Try. The results may surprise you. Therefore, in the next 2-3 months - and that is how much you will need in order to complete the picture - "best friends girls" are not even diamonds and pen, a thick notebook and a calculator. Be sure to collect all receipts and record even the "penny" costs.
Break up all the information on the group and record it intable. For example, "utilities - the amount", "power - the amount", "Entertainment - sum", etc. If you lead such accounts for you - it familiar, then you can immediately proceed to the next item on the preparation of a personal financial plan.
Assets and liabilities - what is it?
Do not be afraid of specific terminology. Everything is very simple. Assets - is all that brings you income. Assets are considered bank deposits, securities, shares of mutual funds. Liabilities - that is costly. For example, bank loans, debts, etc.
Interestingly, one and the same thing in differentsituations can be both a passive and an asset. How? It's very simple! For example, a car - it is versatile. You have to buy gasoline, spend money on maintenance, buying new parts, etc. But! If you start to look for jobs on the machine - it will turn into an asset.
The same goes with the apartment - as long as you live in it youto pay the rent, make repairs, buy new furniture - that is to spend money. And if you hand over its lease and receive revenue - it becomes an asset.
Think about whether you have any liabilities,which can be converted into assets. For example, a plot of land, which no one will ever do. Or an old house in a remote village, inherited. Maybe something from this can be sold - even inexpensive - and invest that money on favorable terms.
Unfortunately, life is unpredictable. Dismissal, the next wave of financial crisis, an accident - all of which can destroy any financial plan. Therefore, before you begin to invest - invest - "extra" money, it is necessary "to err." That is, to reduce the risks.
Financial risks - the worst enemies of even the most carefully thought-out plan. Of course to insure 100% of all miseries and troubles still will not work, but to minimize the risk is possible.
What are the risks and how to reduce them?
The first group - it's unplanned expenses andunemployment. Unplanned expenses - this is not necessarily any large sum. Repairs to the washing machine, a visit to the dentist, the urgent purchase of a new TV set, whether to replace a broken hopelessly old ... but little else. And each such flow will punch a small hole in the design of your financial plan.
And what can we say about the sudden loss of jobs?
How to protect yourself from this? Financial consultants recommend to create a "reserve fund". What it is? It is a certain amount that is sufficient to, without external financial flows, you could easily "hold out" 3-6 months.
The reserve fund is best kept in a bank account with the possibility of replenishment and partial withdrawal. Typically, the interest rate on this account is 5-8% per annum.
The second group - are diseases and accidents. Even normal cycling can result in a long "vacation" in the hospital. Do you wonder what position will be your children, if you suddenly something happens?
In order to protect themselves from such situations,You can use the program of voluntary health insurance and life insurance. The cost of insurance is not so great - in the year about one per cent of the sum insured.
Also do not forget to buy insurance for the duration of overseas trips. Then, if necessary, you can get free medical care there.
The third group - property risks. The fire in the country, the flood in the apartment, car theft - such situations are, unfortunately, not uncommon. In the "fight" with them it takes a lot of effort, time and, of course, money. Use the property insurance programs. This is especially true if you rent an apartment for rent or rarely at his dacha.
The fourth group - "damage to thirdpersons. " This situation is very familiar to most motorists. Besides compulsory insurance CTP, you can use more and voluntary DSAGO. This "save" you, if the amount of payments on obligatory insurance does not override the amount of damage.
Protecting the future. To solve this problem, you can use rechargeable bank accounts or insurance plans of private pension funds. Insurance contracts are, as a rule, at least 10 years. Therefore investments recommended in hard currency - dollars, euros or Swiss francs.
At this stage, in order to understand howcreate a personal financial plan, you need to "reduce the debit with the credit." Calculate your monthly income and add to it the profits arising from the assets. Subtract expenses from the resulting amount.
The resulting amount - is the investment potential. Properly invested money can have a stable income. It sounds great! But how and where to invest this money in order not to "burn itself out" and not lose the last?
To begin, you must decide whether you will dodetermine the investment strategy, or seek help from a financial advisor. Unfortunately, and in that, in both cases, there is some risk.
Types of investors
No matter which option youchoose, it would be a good idea to determine in advance what type of investor you are. What are the different types of investors? Conventionally, they can be divided into three main groups.
- Group One - conservative investor
These people carefully weigh each step andagree to invest only in the event that absolutely sure of a successful outcome. For the conservative investor the most important thing - to preserve their investment. He never takes the risk and take all measures to protect their capital.
Of course, at the same time, conservative incomesmall investor - a type of investment usually gives 3-5% per annum. But they are stable! As a rule, "conservative" never loses, and slowly but surely achieves its goals.
If you belong to this type of investor, then you are advised to at least 60% of their investment potential stored in bank deposits or invest in savings insurance programs.
- Second group - a moderate investor
Moderate investors, of course, also important topreserve their savings, but he does not want to settle for a minimum income. So sometimes he risks. But at the same time, always trying to maintain a balance between low-risk and risky investments. In case of loss, he will repay their debts at the expense of the income from the "win-win" investments. Moderate investments bring, as a rule, 10-12% per annum.
Financial advisers usually recommendmoderate investors split "portfolio" into two equal parts. Half invest in stocks and bonds, and the second part - put on deposit or pay in insurance programs. Suit, also, mixed mutual funds.
- The third group - an aggressive investor
The main objective of the aggressive investor - "to put togetherstate". It relies on high-risk stocks. Of course, in case of success, such securities bring the highest income. People of this type are in one transaction as a get rich and become bankrupt. On average, if all goes well "scenario", an aggressive investor receives 12-20% per annum.
As a rule, aggressive investors - are professionals, clearly presenting what they are dealing with.
If you belong to this type of investors - safely invest most of the savings into hedge funds, stocks and mutual funds. However, forget about conservative investment is not worth it.
How to determine what type of investor you areabout that? Well, first of all, it depends on gender and age. As a rule, women are more cautious than men. A young investors are more fearless than middle-aged people. Although, of course, any rule there are exceptions.
Also, in order to better understand yourself, you can take advantage of special psychological tests.
Well, you're almost there. You're the most important thing - to organize all the information and begin already to realize their personal financial plan. In order to have everything clearly, it is best to make a table. Here there are two ways.
Method one. It is for those who have the phrase "make table" is rampant attack of yawning. If all of these calculations / estimates too painful for you, if you feel that the "linked" to them, do easier - consult your financial advisor. By the way, most new investors do just that.
However, there is one drawback - your expenses added another point.
Method two. He - for thrust. For those who want to thoroughly understand how to create a personal financial plan. Sit comfortably at the computer, put next to the calculator and tell your "home" that they did not stick to you 2-3 hours. Open Excel and paint the table:
- Count One. "Year". In this column are entered in ascending order, all the years, starting from the current year and ending "of the dream."
- Count Two. "Capital at beginning of year." Compare the previous year's income and expenses. Couple all this amount of accumulation, that you have at the moment. You have put them on a bank deposit, is not it? So, you get a 5-8% per annum.
- Count Three. "Amount of investment". This is the money that you put at the end of the year. In order to define it, you must first figure out how much you will have money for an editable bank deposit. By calculating this amount, it is necessary to subtract from it your "emergency fund." Not forgotten? This is - the money, which should be enough for 3-6 months a comfortable existence.
- Count Four. "The financial targets." Record the all of their dreams with a string of the year in which you want to implement them.
- Count Five. "Investment operations". This column will be just three columns: "conservative", "moderate" and "aggressive." You have already decided what type of investor you belong to?
- Here and "scatter" the sum of the third column - "the amount of investments" - in columns, in accordance with their views.
- Sixth Earl. "The funds remaining after the investment." This is - your insurance reserve. Therefore, the number in this column should never change.
- Seventh Earl. "The state investment." It also needs to be divided into 3 columns: "conservative", "moderate" and "aggressive." The number it will show how "grown up" your investment.
- Eighth Earl. "Balance at year-end." In order to fill this column it is necessary to add up the numbers recorded in the sixth and seventh columns. From this amount, subtract the money spent on the realization of financial goals.
- All! The table is filled.
Then the number obtained in the eighth column, it will be necessary to copy in the second column of the following year.
Take a good look at the "handiwork of his." If all the numbers in the table are of positive significance - all in order. So you correctly assessed their abilities and your goals are achievable. Now the main thing - not to retreat and to strictly follow the plan.
Something does not add up? Dont be upset! After all, the financial plan is not something immutable - it is possible, and sometimes necessary, to make adjustments.
Due to what you can do? There are several possibilities. For example, you can increase the time frames for achieving a particular goal. Or plan a purchase not five, and two-bedroom apartments. You can once again carefully weigh your "dream". Perhaps some of them are not so crucial for happiness?
After all, in fact, the main goal - is to gain confidence and become successful and wealthy person. On the way to this goal you have already made a very big step.
So, all you must succeed!</ P>