Already planned for your retirement?
When asked if you know how to manage your money, I am pretty sure that you will say yes. When your answer is a ‘YES’, why in the name of god do you not have enough savings and find it very difficult to meet your ends need towards the end of the month. As you know, managing your finance is not a simple task. Managing your cash flow is more than the art of science.
I have seen many people who think that their method of managing their cash flow is good. I have also seen people who are not bothered about their cash flow and are just ignorant. These kinds of attitudes are very dangerous especially for those who have wishes to be rich.
Only after you know how to manage your cash flow, then you will know can plan for your insurance planning, investment planning, retirement planning, tax planning and estate planning.
As a financial planner, I have to quantify goals for my clients. Sometimes, these goals are overly impossible to achieve and sometimes, they are just vague numbers. Retirement planning is the most complex amongst all as it is the furthest goal at least for most of the people.
E.g. Ming is a 40 year old man that wishes to have $1,000,000 as his retirement account. Currently, his savings in his bank account is $100,000 and he is drawing a $2,500 worth of pay. He also has an endowment plan set to mature at the age of 65 and the maturity value is $50,000. Assuming that he has no dependants and wish to retire at 65; this will be his shortfall
Retirement account= $1,000,000
Net surplus= $850,000
Years to retire= 25 years
Monthly savings= $2,666 (impossible)
Savings itself is not possible for Ming to achieve his retirement account. He will have to have some kind of investment that will pay him good interest. in order for him to enjoy the interest, he will need to know some kind of investment knowledge or at least get someone that can help him.
Factors like inflation rate, return rates on investments, future dollar value and power of compounding must be considered in planning one’s financial goals. Even if you have the best plan, sometimes things can go wrong too. Financial plans have to be monitored and must be analysed on an annual basis.
Assuming that he made some changes to his cash flow management, engage a financial planner and try to come up with some recommendations, this is how it would look like
Investment of his $100,000 @ 10% interest after inflation=$1,083,470
As you can see, Ming seem to have hit the $1,000,000 mark that he wanted for hid retirement fund but let me tell you something, that $1,000,000 that he plan is not even a number that is accurate. Having an accurate retirement fund is not a number game; there are ways to calculate it. If you already have a financial planner that you think does not plan your retirement fund appropriately, you will be at a losing end when you reach your retirement years. It will be a good move if you have the right financial planner.
I have seen many people who think that their method of managing their cash flow is good. I have also seen people who are not bothered about their cash flow and are just ignorant. These kinds of attitudes are very dangerous especially for those who have wishes to be rich.
Only after you know how to manage your cash flow, then you will know can plan for your insurance planning, investment planning, retirement planning, tax planning and estate planning.
As a financial planner, I have to quantify goals for my clients. Sometimes, these goals are overly impossible to achieve and sometimes, they are just vague numbers. Retirement planning is the most complex amongst all as it is the furthest goal at least for most of the people.
E.g. Ming is a 40 year old man that wishes to have $1,000,000 as his retirement account. Currently, his savings in his bank account is $100,000 and he is drawing a $2,500 worth of pay. He also has an endowment plan set to mature at the age of 65 and the maturity value is $50,000. Assuming that he has no dependants and wish to retire at 65; this will be his shortfall
Retirement account= $1,000,000
Net surplus= $850,000
Years to retire= 25 years
Monthly savings= $2,666 (impossible)
Savings itself is not possible for Ming to achieve his retirement account. He will have to have some kind of investment that will pay him good interest. in order for him to enjoy the interest, he will need to know some kind of investment knowledge or at least get someone that can help him.
Factors like inflation rate, return rates on investments, future dollar value and power of compounding must be considered in planning one’s financial goals. Even if you have the best plan, sometimes things can go wrong too. Financial plans have to be monitored and must be analysed on an annual basis.
Assuming that he made some changes to his cash flow management, engage a financial planner and try to come up with some recommendations, this is how it would look like
Investment of his $100,000 @ 10% interest after inflation=$1,083,470
As you can see, Ming seem to have hit the $1,000,000 mark that he wanted for hid retirement fund but let me tell you something, that $1,000,000 that he plan is not even a number that is accurate. Having an accurate retirement fund is not a number game; there are ways to calculate it. If you already have a financial planner that you think does not plan your retirement fund appropriately, you will be at a losing end when you reach your retirement years. It will be a good move if you have the right financial planner.
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