The 6 Steps of Financial Planning

financial planningOne of the most important tools in ensuring wealth creation during the course of your working life is the process of financial planning. Most people work hard toward certain goals in life, focussing a great deal of energy on their careers and families. Unfortunately, with the pressures of work and the responsibilities of family life, few people have the time and expertise to plan their finances precisely.

Financial planners are trained to assist you with a variety of important decisions and strategies that are designed to maximise wealth creation and help you to plan for costly life events such as purchasing property and motor vehicles, sending your children to school and university, and of course planning for your retirement. They also specialise in estate planning, tax advice, and can assist you in managing your small business to maximise your wealth.

When meeting with a financial planner, one of the first goals the two of you will work towards is discussing your financial status and finding ways to optimise your earning, spending, and investment habits. Through tax advice, you will be able to retain more of your earnings, while monthly budgeting strategies will empower you to enjoy the lifestyle you desire while creating a monthly surplus that can be invested

The six steps followed by financial planners are as follows:

Step 1: Setting Goals.

You and your financial advisor will agree on your financial goals, based on your earnings, lifestyle desires and investment priorities.

Step 2: Gathering Relevant Information

Your financial advisor will request information about your financial situation, which will be used to create a tailor-made financial plan that suits your unique needs.

Step 3: Analysis

Your financial advisor will use a variety of reliable tools to assess your financial situation, based on the information provided.

Step 4: Constructing the Plan

A financial plan that takes into account your financial situation and financial goals, will be created and presented to you.

Step 5: Implementation

In partnership with your financial planner, you will make use of the advice and strategies in your financial plan to help you achieve your goals.

Step 6: Monitoring and Evaluation

As you progress with your financial plan, you will meet with your financial advisor from time to time. At these meetings, your feedback and the status of your financial goals will be used to ensure that your financial plan is meeting your needs. If necessary, the plan will be modified to ensure that you meet your personal financial goals.

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