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| In life, the longest and most important journey one will ever take, most of us live with neither a firm objective nor a concrete, realistic, long-term plan that addresses the most important of life’s many questions: “How much money will we need for this journey, and when will we need it?” “Where and how will we spend this money?” And, “How will we prepare ourselves for the unpredictable risks in life such as accidents or illnesses?” Based on our experiences, we typically prepare a 1–year plan at best, or we take a guess at some type of income & expense plan. By doing so, instead of realizing our dreams at the right time and in the right manner, we waste money and let our objectives slip away. And as a result, hard times can follow. Financial planning can be likened to the preparation of a map, compass, and spending plan for the voyage of life, the most important journey we will ever take. If we can plan and provide proper funds at the correct scale and at the right time to suit our personal objectives, our lives will be much stabler and more favorable. Unfortunately, people commit the following mistakes when it comes to financial planning: |
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| Most of us spend more time planning our vacations than we do establishing a financial plan for our futures. If we don’t plan for our future in advance, a bumpy road awaits us. |
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| If we prepare a plan but don’t act upon it, we are more likely to take a wrong turn, even if we have chosen a more proper path. |
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| The earlier we start, the faster we can reach our objectives. Similarly, if we start investing and saving much earlier, we can increase our wealth that much faster – this is the beauty of compounding interest. |
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| A record serves as a benchmark to perceive where we currently stand. It is also our personal barometer, assessing how we have fared within our financial plans. |
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| Keep asking questions concerning our wealth and always be learning. Without sufficient knowledge and experience, we are likely to fail. |
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