Many people today are planning and looking for ways to grow
their hard earned money. But the big problem is that they do not use the proper
vehicle in growing their money. That is why we just put it on savings account
and time deposit. I am not against these things but I just want you to know
that there is more than that. (It will be my next Blog Topic Investment Vehicles). And
worst, many Filipinos plunged into SCAMS. It is very evident on our country,
you can see it on TV, Newspaper and recently on Social Media “Paluwagan” that
gives you return of 40% in just 5 days. My heart aches seeing these people
crying bucket of tires. The big problem is lack of education. I provided below
some of the basic things to consider in financial planning.
These 4 simple steps are so powerful that it can be
applied on savings, investments, and somehow on starting a business. These are
the basic things to consider in planning your financial goals. It really helped
me as well.
1. Objective / Goal
- You must clearly define your financial goal. Ask yourself this basic question, “What am I saving for?”
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2. Time Horizon
- You must identify the number of years that your money will be invested. Different goals may have different investment vehicles. Ask yourself this basic question, “When do I need the money?”
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3. Budget
- You must have a comfortable budget for your financial goals. I suggest you do the computation so that you can invest the EXTRA cash only, particularly if you are in a medium term to long term investment horizon. Ask yourself this basic question, “How much can I set aside regularly?”
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4. Risk Tolerance
- You must know what you are getting into, where your money will be invested – stocks, mutual fund, bonds, business, real estate, and etc. Here is a tip of advice - STUDY IT FIRST. As what the financial TV show, Peso and Sense, always says, “Aral muna bago mag invest”. Ask yourself this basic question, “What risk am I willing to take?”
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I hope this helps you in preparing on your financial goals.
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