The Four Stages of Financial Life
September 23, 2006
Just as a child’s needs change over time as he gets older, your needs change too. That includes financial goals and needs. But by anticipating your needs, you’ll be better prepared financially to meet them.
Most people go through the following four stages of financial life:
2. Building a family (30s)
3. Middle age: your career peak (40s and 50s)
4. Retirement (60s and beyond)
Let’s look at each one.
How to make a financial plan
September 14, 2006
Most people want to have a nice home, put their kids to good schools, have the things they need, and live well in retirement. A comfortable lifestyle, however, does not just happen overnight, unless you win the lotto jackpot.
It takes foresight and planning, which has to start now. Have a financial road map to get you from where you are right now to where you want to be in 1, 10, 30 years or more.
What is a financial plan?
According to the book The Citibank Guide to Building Personal Wealth, “A financial plan is not a prediction of the future but a tool to help you in attaining what you want in life.”
It includes your realistic and achievable targets, taking into consideration your earnings potential, lifestyle expenses, and your tolerance for investment risks. Although a financial planner or investment adviser can make a financial plan for you, you can map out your own plan.
What’s your net worth?
September 10, 2006
If you have to put a price tag on yourself, what amount would you pick? Determining your true net worth in real pesos is the first step towards financial independence. In fact, if you want to get ahead in life and be financially secure, you should know your net worth now.
Just what is net worth? It is the difference between your total assets and your total liabilities. It sounds pretty simple, but few people make time to calculate for it.
