Back To Basics - Platform For A Sound Financial Planning

Most of us find financial planning daunting and often too complicated to do. But the truth is, it’s logically simple to construct. All you need is some simple tips and not forgetting: start young and start it right!

To help you get started on building the foundation, here are some simple questions for you to ponder:

Main Factors	Questions to Ponder
Risk Management	Age & Risk – If you’re in your 20s, chances are you can afford to be a risk taker. Otherwise, it would be better if you lower the risk level and play it safe. Career Risks – Can you take the risk of joining a newly set-up company or would you prefer to join a rock solid company like a Multi-National Company (MNC)? Groundwork – If you are into investments, do your homework well so that you don’t have to suffer the brunt of a bad investment.
Career Choice	Marketability – Find out how marketable you are. Then look for ways to increase your marketability eg. Trainings or earning a post-graduate degree. This will help to determine how much you can earn. Skill Relevancy – An IT Specialist will need to constantly invest in trainings to continuously upgrade their skills and knowledge. A well-sought after skill will help you cash in on a fatter pay cheque.
Lifestyle	In Trend – A flamboyant lifestyle is likely to cost more. Decide what is truly important to you in the long run. Would you rather enjoy first but suffer later or live modestly but have a comfortable retirement at age 40? Dream Home – Freeholds vs Leaseholds. Semi-Ds vs Apartments. Decide why you want something and know why you want it. Don’t get a big house just because you dreamt of it since you were young.
Debt Management	Cash or Cards? A high usage of credit cards may also mean a high dose of debt (not forgetting 18% of interest incurred per month). Tracking – A detailed recording of each cent spent serves as an invaluable personal financial database. Monitoring your debt level is also crucial to determining your financial health. Strategize – If you have a debt to clear, strategize from an early stage how and when you can be debt free.
Insurance	Insure Your Future – Have you signed up for a Personal Accident Plan for any insurance policy? It’s best to get your house insured along with other assets that you may have. This will protect you in case if you’re unable to work permanently due to disability incurred by an accident or if your new car has been stolen.

taken from CIMB.com.my