How to create a personal financial plan

How to create a personal financial plan

Before you start investing money andcreate capital, you need to make a personal financial plan. In this document, the financial goal that you plan to achieve after a certain period of time should be spelled out.

How to create a personal financial plan

Instructions

1

It is very important to correctly formulate the goal, thisit is not easy, because 90% of people do not represent what they seek financially. Only knowing the purpose of applying for investment, you place the money correctly.

2

As a rule, the most common financialthe objectives are: the acquisition of real estate, the formation of children, the accumulation of funds for retirement. It should be noted that the financial plan may change over time. The reason is the addition of new financial goals.

3

In order to determine whether the financialgoal is achievable, make calculations. Put things in order in personal finances - evaluate assets and liabilities, see what kind of income the assets bring.

4

Correct assignment of a thing to assets or liabilitiesA pledge of successful evaluation. For example, a standing closed old apartment, in which you do not live, refers to liabilities. And this despite the fact that it, theoretically, grows in value. So, for an apartment you have to pay a monthly rent, spend money, which only increases costs.

5

But, if you start renting an apartment,it will become an asset. It will not only grow in value, but also monthly generate income that covers housing maintenance costs. Thus, you must strive to ensure that assets prevail over liabilities.

6

Also it is necessary to reconsider the attitude to credits. Debts can be conditionally attributed to good - when they go to business development, or to bad. Most of the loans taken are bad debts, which only pull the family down. Such loans should be disposed of. It is better to focus on your money, not on borrowed funds. Then you will create capital faster.

7

The next step is to determine the amount that you can allocate for the investment on a monthly basis without pain.

8

Identify the risks that you are willing to take wheninvestment. The main ones are market and currency risk. Market risk does not include the bankruptcy of banks or companies. Such a risk is understood only as a market fluctuation of the financial instrument that you use when investing.

9

So, with aggressive investment, assets need to bebe prepared for the fact that assets may fall in price by 15% or more. But the long-term profit of such instruments is much higher than that of conservative instruments. However, it is better to choose a more conservative strategy, and to place aggressive tools only part of the funds. Priority is better to choose the preservation of money, rather than their rapid augmentation.

10

Make financial calculations, write down the resulton paper. If you do not know where to invest to create capital, contact a financial adviser. Only choose an experienced specialist who has certificates. The reputation of the consultant must be flawless.