Posted by on Mar 15, 2021 in Finance | Comments Off on Investing Without Financial Plan and Goals

Investing Without Financial Plan and Goals

In times of plenty, we look for a safe haven for excess cash that will produce potential passive income. Some of us take desperate measures to maximize our money supply in order to meet the demands of the day in times of need. Both activities necessitate investment decisions, which many of us are often ill-equipped or inexperienced to make without assistance. As a result, knowing the answers to the four “wives” (why, where, where, and who) and one “husband” (how) questions about investing and financial planning is important. The two most critical prerequisites for making wise investments will be discussed in this article. To know moreĀ view the post.

I am often asked for investing tips or guidance as a licenced financial planner and a business and financial adviser to small and medium businesses. It makes no difference whether I am a great investment guru or tipster because I will never answer such questions without first studying and knowing the questioner’s financial history, status, and financial goals. This article is not meant to be a guide on investing or financial planning; there are plenty of books on the topic available in any decent high street or online bookstore. Rather, I’d like to discuss what I believe to be the top two pre-requisites that an investor should consider before making an investment decision.

Create a financial plan with SMART objectives.

Planning is something we all do on a daily basis, whether it’s for a trip, a wedding, or some other event or to accomplish a specific goal. However, how many of us really get interested in creating and implementing a detailed personal financial plan? Why not, if not?

Financial planning is described by the Certified Financial Planner Board of Standards, Inc (CFPBSI) as “the method of achieving your life goals through proper financial management.” Life goals are aspirations that we hold dear and would like to see realised, especially throughout our lifetime. Saving for a car or a round-the-world cruise, for example, or spending to offset the impact of inflation in retirement planning, are examples of such targets.