Thursday, July 26, 2012

Why Financial Planning is necessary?

Some rich people hire the financial adviser to construct the financial planning for them. They realize that financial planning is necessary for them. They can plan to make the company great or live comfort after retire.

Here is why the financial planning is necessary:

The spending should be less than the income is the main principle of the financial planning. The financial planning can help us to manage our money. It helps us what kind money for spending or saving for any people.

The financial planning can estimate your financial needs in future. You may have some plan for future such as buying house, paying kid college, traveling around the world and else.
If you want make your dream come true, you can estimate the money you need in future. If you just an ordinary clerk, you must be difficult to make your dream come true.
In financial planning, we put the money not only in stock only but also other investment such as ETF, mutual fund, precious metal, and else. You are in high risk when you put all money at stock only or bond only.
Some financial plan as to diversify the asset to various financial assets or real asset. When the economic tight, they can buy more real asset such as plantation, cattle, chicken and others.
We need to set up the retirement when you have no long work. It can guarantee you to get cash stream when you have no salary. The financial planning suggest as to set apart of our salary for retirement. The amount of money that you save at the retirement fund will increase. It because the investment generate the revenue. If you have no retirement fund, you can invest directly to the some company. In future, they may fulfill your necessity someday. The financial planning explain the steps to go wealth with restricted salary that you have. It suggest you live in frugal though you can generate million dollars.
Big Expenses
What happen to us in future is unpredictable. That is why the financial planning is important to fulfill the big expenses. A employee may got sick after working hard, the child may need dozen thousand dollar for college fee, and so. Without good financial planning, the man could not fulfill the big expenses.
A good financial planning encourage man to prepare money fro big expenses. They should not worry about the big expenses.
Read Also :
Financial Planning for retirement
How employee makes money while they still works
Move to financial assets to hard assets

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