Financial planning

I had 2 very interesting people that I met today and discussed with them about financial planning. The term financial planning itself is often misunderstood and people usually think that financial planning is a simple task and everyone can plan their own finances. Financial planning is the process of meeting your life goals through proper management of your finances. It is not an easy plan to develop if you do not have the competency and skills.

Back to the conversations that I had earlier, one of them told me that he already had his finances planned and he was very confident that he does not need my help. I knew in that instance that this guy will not know anything about his retirement planning and I asked him how much will he require if he were to retire when he reach 65 years of age.

He laughed loudly as if I was joking and told me that calculating his retirement fund is an impossible task and his plan of retirement is to acquire as much money as possible. He was not sure how much money he will require but he was certain that he was on track. He assured me that I need not worry about his retirement planning.

I admit I was a bit agitated but I told him that I can calculate his retirement fund needed. As I was explaining to him and given him the numbers, he looked flabbergasted and asked me to plan him his retirement planning immediately. I was so happy that he was willing to listen and take actions.

The other conversation that I had was with a 40 year old man. He has 3 children that he has to support and has high hopes on them. When I asked him does he have enough money to pay for his children’s higher education, his face went blank. He then told me that he should have enough and with all the study loans that are available, he has nothing to worry. This time round, my face went blank.

I asked him whether he is ready to pay his child’s educations loans for the rest of his life and his answer was very brief and simple. All he said to me was, he has no choice and if he has to work hard to pay for his children’s education, he will do it even if it means that he has to work even during his retirement years. I was moved by his paternal love and told him that he does have alternatives.

As you can see, financial planning is very important and having a good financial plan will add leverage to your life. Leverages that can even lead you to your financial freedom.