Basics of Financial Planning - 5 Simple Steps to Success!

I have been asked by many people over the past few years this question, "What do I need to do first in order to get my personal finances together?"

When people first started asking me this question, I have to be honest I wasn't sure what to tell them.

Now that some time has passed though, I feel as though the ANSWER to this question is quite simple.

What I mean to say is that the ANSWER is simple, but what trips people up isn't the ANSWER but the
ACTION.

So what I am going to do for you today is answer the question: "What do I need to do first in order to get my personal finances together?" by supplying you with some basic ACTION steps to get you started in the right direction.

STEP 1 - Determine Your Values.

This step may seem a little out of place for financial planning. Most people ask me, "What do my values have to do with my finances?"

I say to them, "Stop for a minute and think about it, is there anything more important than your values?"

All your decisions are based on your own personal set of values. Where you live, what you drive, how much and where you spend your money, what you focus your time and energy on - are all affected by your values.

This is why once I understood Step 1; I could tell people with one hundred percent certainty that once you have a clear picture of what you value most in your life - you'll be better able to figure out how to create your personal financial plan.

At this point you need to take an action step: I want you to take about 30 minutes and write down what your top 5 values are. Remember, we are talking about values not goals.

Values are security, happiness and freedom. Goals are pay off mortgage, be debt free, etc... Once you have figured out your top 5 goals you are well on your way to personal financial success.

STEP 2 - Determine Your Goals.

Now that you know what you value in life, it is time to base your goals on these values.
What I mean by that is if you chose, Security as one of your values, then one of your financial goals could be to start putting aside 10 % of your income for an emergency account.

Another example would be if you chose Excitement as one of your value, then one of your financial goals would be to start putting aside $50 a week aside to take your family on a monthly trip.

Whatever you want to do that is in line with your values needs to be considered.

To get you started, I would take your five Values and chose 3-5 quantifiable, goals that you would like to accomplish for each value.

STEP 3 - Get Organized

Now that you have a better understanding of yourself and what you want based on your values you can begin to focus on your financial situation.

The reason, Step 3 - Get Organized is after determine your values and goals is because, this is the hardest part of the whole process.

Being that this is the hardest part of the process, you can now look back at your values and goals and have some motivation to keep you on track.

Getting organized sounds harder that it is, especially when it comes to personal finances.

The best way to get a handle on your total financial situation is create a system for filing and keeping all your personal financial documents so you know where they are and can reference them fairly easy if needed.

I recommend using a hanging file folder system. All you need is a hanging file folder box/crate, about 15 hanging file folder, and about 100 manila folders.

The most important items that you will need to track are: Taxes (7 years back), Retirement Accounts, Social Security, Investment Accounts, Savings and Checking Accounts, Household accounts, Credit Card Debts, Other Liabilities (debts other than credit cards and mortgage), Insurance. These 9 accounts are the most important and will help you have a better understanding of your total financial picture.

So your action step at this time is to create a filing system so that you can store, access and understand your personal financial documents. Don't skip this step, it is the most important of the five.

STEP 4 - Determine Your Plan/Budget - Retirement, Savings, Investments, and Tithing

Once you have a better picture of your current financial situation. It is time to be honest with yourself and decide whether you think you are on the right track or you need to overhaul your financial plan.

Most people at this point have decided that they need a complete overhaul. Again, don't get discouraged, because this isn't as hard as most people make it out to be.

Determining your Plan/Budget is really just decided what your priorities are and where you money needs to go!

The hard part about this is making sure you are paying the most important people first. I make my priorities Self, Bills, Cost of Living, Fun/Excitement.

When I say Self - I mean "Paying myself first!" Taking a percentage of my hard earned dollars out of my paycheck and dividing in up between saving, investing, and tithing. I pay myself first because I am the most important in my life.

When I say Bills - I mean fixed expenses that you pay month to month. Mortgage payment, gas, water, power, etc.... Things that very rarely change month to month.

When I say Cost of Living - I mean variable expenses that fluctuate month to month. Groceries, dining out, vehicle gas, etc... Things that change month to month.

When I say Fun/Excitement - I mean expenses for things that I want to buy like, golf clubs, cars, guns, etc. Stuff that you want.

Over time you can create a budget yourself or tell a CPA exactly what you want and they can develop a budgeting system that you can use to keep track of what you spend and then you can adjust it yearly as needed.

STEP 5 - Implement Your Plan

Now that you have taken the time to figure out what your values and goals are. You have developed a system for tracking all of your financial information and created a budget based on your values and goals, you have to take action steps to achieving them. This will seem like the hardest part of the whole process but just remember that all things that are worth doing and getting better at take time.

Make a commitment to yourself to take small actions daily to move closer to your ideal financial situation. This process may take up to 12 months.

The question you need to ask yourself though is, would you rather be in the same situation financially in 12 months or would you like to be 5 steps ahead.

It's up to you to make that decision. I hope this has been helpful and look forward to your comments.

Asset Management Strategy Map For Long Term Financial Success

Asset management is a term that refers to the investment management procedures of collective investments. Simply, this is the administration of financial assets that will help a company maximize its returns. This is often associated with investment on stocks, shares and others. Having an asset strategy map can be very helpful when it comes to dealing with the transactions in this process. However, one needs to understand that there is a need to comprehend each and every dimension involved in the strategy map in order for one to be able to use it as a guide in realizing the corporate goals.

If you are dealing or investing on stocks and you would like to draw a strategy map in this aspect, you will have to first consider and later, make a conclusion regarding the value of the stocks. Find out the overvalued, the fairly valued and the undervalued. These three will depend upon your transactions particularly in the underlying stock and uncertainties. Your asset management strategy map can be done through a table with the vertical and horizontal sides filled with appropriate aspects. As you may know, the strategy map is a method performed by many business leaders in order for them to completely understand their strategies with the help of the visual illustrations. Therefore, they believe it is much more simplified when the strategic plans are drawn out in such a way that everybody in the company will understand. Implementing the strategy map can be quite difficult but it is much easier since it will provide a step by step process for the employees and executives to view.

In your asset management strategy map, it is important that you are able to distinguish which among them is the most important. The diagram will help you understand the goals, strategies and plans in the business that are needed to be realized and are critical to the success of the company. For instance, you view the process of buying bearish as something that is low in importance, then you can provide a table that will divide the elements cording to their worth to your company separately.

There are four things that you have to consider when drawing a strategy map for asset management. The first thing is that it should have a purpose. Why will you be using the strategy map for? In this case, it is for asset management. Bear in mind that you can have as many strategy maps as you want in every department so ensure that you have everything labeled so as not to confuse the other people in your company. Next is the design, which is quite important because you should make certain that the pattern is clear and comprehensible.

Your strategy map should demonstrate the findings. Here, it is important to remember that every strategy map should include the cause and effect of the tactics that are taken into account. The last is the originality or the value of the map. Competitive advancement and tangible benefits will only materialize when you understand the whole framework of your asset management strategy map.

Achieving Financial Success Through Prosperity Consciousness

For you to be successful in your endeavors you first have to condition your mind to the goals you want to achieve. In other words, you have to have a burning desire to succeed!

Everybody wants to be financially successful in order to live a comfortable and rewarding life, but this daunting feat is not attainable by most people because of their misconception of money. The myriad of fails belief that most people harbor about money is demoralizing. One of the popular adages, is that, money is the root of all evil. Money can't be evil because it is an idea that is conceived in your mind. There is a scripter in the bible that stresses on money, "A feast is made for laughter, and wine maketh merry, but money answereth all things." (Ecclesiastes 10: 19). Indeed, money is a means to an end and you chose what you do with it.

POSITIVE THINKING

Success is germinated in the mind before you, with the help of conscious effort, can make it into a reality. This process takes place in the subconscious mind. The subconscious mind is a store house of information. Therefore, It is can be likened to a computer's memory bank. Furthermore, the mind will assimilate anything you focus on, whether it is negative or positive thought impulses. In fact, you become what you think about. Naturally, these thought impulses are influenced by your surroundings, whether it is your family or friends, it can have a profound effect on you. Bear in mind though that your life always moves in the direction of your thoughts.

ATTITUDE

Emotionally disturbed persons are the once who create their own dilemma in life, because once your emotion hold sway, your intellectual capacity diminishes. It is easy for us humans to think negative thoughts and the decisions it influenced will have a profound impact on us. You see, the choices we make in life are as a result of our thoughts. It will dictate how we lead our lives and if you want to live a prosperous life you have to get in the habit of thinking positively and surround yourself with people who have similar perspective. Further more, most successful people are achievers and they are progressive because they have found their niche in life. They will help you to be a better person in life. Research has shown that positive people share one thing in common, and that is the desire to succeed. As the cliche correctly states, "whatever the mind of man can conceive and believe it can achieve." That is why poverty is not an excuse for frailer. It's only a mental disease; it is the property of poor thought. Nevertheless, our achievements are as a result of our philosophy of life. Suffice it to say though, that life is a just employer, it gives you what you ask of it. However, if you fail to plan for it, you are definitely planning to fail in life.

SPENDERS

It takes proper money management planning to escape the spiral of poverty. Those who never seem to have enough money to satisfy their unlimited wants are those who are caught up in a web of poverty.

These people whose unlimited wants exceed their available resources are terms as spenders, irrespective of how much money they earn, they probably cannot balance both spending and earning. The former will always exceed the latter. This is because they lack financial intelligence, together, with a need to fulfill a psychological emptiness with an illusion of material wealth.

Spenders approach the market from a seller's perspective. Their propensity to spend is much higher than the propensity to save. They have a "buy save later" attitude. They have no hope for the future, live today starve tomorrow is their philosophical base. However, from an aggregate perspective these people have the ability to generate economic demand for goods and services produced by the said economy.

GUIDES TO PROPER MONEY MANAGEMENT

One of the main obstacles to financial success is inflation, especially, as your income is vulnerable to it. The best way to escape from this financial crisis is to think of ways to supplement your income, which is, improving your earning capacity.

You invest more in yourself and less on yourself. For example, education will do more for your well-being than clothes will do for your physical attire. Also, get rid of the false pride.

Try to live within your means. Some poor people are living wealthy lifestyles.

You should have a clearly define objective and the ability to change along with the times.

Proper planning and determination should help you to achieve your objective and if you are set back with temporary defeat on your first try, try again. Because once you keep on trying, the greater your success will be.

Make a Household Budget to monitor your expenses, and see if they are too high or where you can cut back.

Do not let procrastination and indecision take charge of your life.

You don't have to have money to make money, it takes a very good money-making idea and a well laid out business plan and the ability to convince investors. The investors could be your friends that could provide the capital for your business.

Be on the lookout for good money-making prospects and get the facts about any investment scheme you are embarking on. Furthermore, read financial magazines, go to financial seminars and seek the help of an Investment Adviser.

Insufficient income is the lack of effort on your part in finding ways to supplement your income and indebtedness is the result of poor planning. To escape from this financial conundrum, you have to get yourself in the habit of paying yourself first and live on what is left. By doing that you will be building a capital base for yourself that you can rely on in the future.

RESTRAIN FROM BORROWING TO CONSUME OR REPAY DEBTS! You should borrow for productive use only. Also, do not buy on impulses. You must compare prices and shop around for bargains.

Avoid traveling with too much money on your person or putting it in places where it is easily accessible. This could lead to temptation to spend.

Hard work without a purpose sends you to your grave, but diligently using your mind will put you on the road to success.

Be kind to the needy and less fortunate. This will help to give you peace of mind.

Give money with a cheerful heart. It is important to your happiness and well-being. In all, money adores a prosperous attitude.

CONCLUSION

Achieving financial success does not come overnight. It will take time, determination, hard work and along with financial intelligence. In addition, you would have to have a sound financial plan to be on a solid ground.

It is not enough today just to work and earn a salary, because a job is no longer guaranteed, you must have an additional source of income to act as a cushion in the event of any unforeseen circumstances.